The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has released International Public Sector Accounting Standards (IPSASs) which identify disclosures to be made by governments and other public sector entities that make their approved budgets publicly available. These disclosures will contribute greatly to improving accountability by helping readers to compare budget amounts with actual amounts arising from carrying out the budget.

A new standard, IPSAS 24, Presentation of Budget Information in Financial Statements, applies to entities that adopt the accrual basis of financial reporting. In addition, the cash basis IPSAS, Financial Reporting under the Cash Basis of Accounting, has been updated to include both required and encouraged disclosures that apply to entities that adopt the cash basis of financial reporting.

Both standards require that a comparison of budget and actual amounts for the reporting period be included in the financial statements. They also require explanations for material differences between the budget and actual amounts in the notes to the financial statements or in a separate report issued in conjunction with those statements.

"Reporting the actual amounts resulting from execution of budget against the approved budget and explaining the variance will enhance the transparency of financial statements," states Philippe Adhémar, immediate past Chair of the IPSASB who oversaw the development of the new standards. "Compliance with the standards enables public sector entities to better discharge their accountability obligations by demonstrating compliance with the approved budget for which they are held publicly accountable."

IPSAS 24 and Financial Reporting under the Cash Basis of Accounting can be downloaded from the IFAC online bookstore: https://www.ifac.org/store. Both standards will also be included in the 2007 edition of the Handbook of International Public Sector Pronouncements.

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high quality performance by professional accountants in business.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has released a new standard on reporting revenue from non-exchange transactions. This new standard will contribute greatly to enhancing the transparency of financial reporting by governments and other public sector entities. Taxes and transfers are the major source of revenue for most governments and other public sector entities. However, internationally agreed requirements for financial reporting of these revenues have not previously been developed.

IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers), addresses a range of matters critical to government financial reporting of tax revenue, including the basis on which a wide range of taxes should be recognized and measured. It also deals with the other major source of non-exchange revenue for public sector entities - transfers, which include grants from other governments and international organizations, gifts and donations. In addition, the IPSAS establishes requirements on how conditions and restrictions on the use of transferred resources are to be reflected in the financial statements.

"IPSAS 23 is the culmination of four and a half years of intense work, debate and consultation by the IPSASB, which specifically solicited the input of experts in the field of governmental financial reporting throughout the world," states Philippe Adhémar, IPSASB Chair. "This new standard also represents a major achievement for the IPSASB in addressing public sector specific issues at a global level and in establishing an international benchmark for the financial reporting of taxes and transfers. Compliance with IPSAS 23 will enhance the quality, comparability and transparency of financial reporting by public sector entities around the world."

IPSAS 23 can be downloaded from the IFAC online bookstore: https://www.ifac.org/store. It will also be included in the 2007 edition of the Handbook of International Public Sector Pronouncements.

About IFAC

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high quality performance by professional accountants in business.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has released a new International Public Sector Accounting Standard (IPSAS) designed to improve the quality and uniformity of financial information reported by public sector entities around the world.

IPSAS 22, Disclosure of Financial Information about the General Government Sector, establishes requirements for governments that choose to disclose information about the general government sector and that prepare their financial statements under the accrual basis of accounting. The new standard permits governments to disaggregate their consolidated financial statements in accordance with the sectors established in the statistical bases of financial reporting. This is significant because it will allow governments to distinguish the financial position, performance and cash flows of the general government sector, which is comprised of government controlled entities that are primarily engaged in non-market activities. It was developed in consultation with the International Task Force on Harmonization of Public Sector Accounting, whose goal is to harmonize the statistical and financial reporting requirements of governments.

"In many jurisdictions, governments prepare budgets and have their performance assessed on the basis of statistical requirements," states Philippe Adhémar, IPSASB Chair. "This IPSAS will enable governments to disclose the operations of the general government sector, which will provide a higher level of transparency to the public. It is also a useful bridge between the world of accountants and national accounts statisticians."

Because this information is not required in many jurisdictions, the IPSAS is a voluntary disclosure standard. IPSAS 22 can be downloaded from the IFAC online bookstore: https://www.ifac.org/store. It will also be included in the 2007 edition of the Handbook of International Public Sector Accounting Pronouncements.

About IFAC

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high quality performance by professional accountants in business.

This information paper considers the experiences of the United States of America in its movement to accrual accounting. It outlines the development of administrative arrangements for formal standards setting over 70 years at the local, state and federal government levels in the US and highlights key factors shaping the standards setting structure.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has issued an exposure draft (ED) designed to strengthen the disclosure of financial information about external assistance, such as emergency assistance and development aid received by governments and government agencies in developing and other countries.

ED 32, Financial Reporting under the Cash Basis of Accounting - Disclosure Requirements for Recipients of External Assistance, proposes that the financial statements of recipients of external assistance disclose the total amount of external assistance received, used, and available during the reporting period. These disclosures will increase the transparency of the financial statements of recipients and contribute to greater accountability by the recipients of such assistance. ED 32 also encourages a range of additional disclosures which will further enhance the usefulness of the financial statements in the assessment of the financial position of recipients and of their use of external assistance.

"ED 32 reflects an approach that enhances the accountability of financial statements, does not impose an inappropriate burden on reporting entities, and can be justified on a cost-benefit basis across a wide range of jurisdictions. While establishing basic accountability requirements, it is also responsive to the ability of individual recipients to comply with the proposed requirements," emphasizes IPSASB Chair Philippe Adhémar.

ED 32 was developed following consideration of responses that the IPSASB received to a previous exposure draft, ED 24, a document with the same title which was issued in February 2005. ED 32 proposes amendments to address constituents' concerns regarding the previous exposure draft.

"Respondents to the previous exposure draft, ED 24, expressed concern that many recipients of external assistance would find compliance with the proposed requirements onerous. ED 32 responds to those concerns by establishing an appropriate balance between required components and those which are encouraged. It has been developed after extensive consultation with our Consultative Group and other constituents," explains Mr. Adhémar.

Before a final International Public Sector Accounting Standard is approved, ED 32 will be field tested. The IPSASB has secured the support of key regional and international organizations for this testing.

How to Comment

Comments on the ED are requested by March 31, 2007. The ED may be viewed by going to https://www.ifac.org/EDs. Comments may be submitted by email to publicsectorpubs@ifac.org. They can also be faxed to the attention of the IPSASB Technical Director at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About IFAC

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC's current membership consists of approximately 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

Good afternoon ladies and gentlemen. My name is Ian Ball, and I am the CEO of IFAC. It is a pleasure to be here today to talk about government financial reporting, a topic that is of great importance to me and one that is certainly receiving attention from the media, the public and governments themselves.

For the majority of public sector entities, the costs of employee benefits have a major impact on financial performance and financial position. To assist governments and other public sector entities in appropriately accounting for these benefits, the International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has issued an exposure draft (ED) of a proposed new International Public Sector Accounting Standard (IPSAS), ED 31, Employee Benefits.

"The proposed standard will contribute to more transparent and consistent accounting for employee benefits, which is essential to ensure responsible financial reporting by governments and other entities," emphasizes IPSASB Chair Philippe Adhémar. "The significance ofemployee benefits for the vast majority of public sector entities cannot be overestimated. The ED's requirements that entities account for obligations under public sector defined benefit plans and, when appropriate, recognize liabilities related to those obligations are particularly notable and may lead to important changes in existing practice for many public sector entities globally."

ED 31 is based on International Accounting Standard (IAS) 19, Employee Benefits, and addresses the four categories of employee benefits dealt with in IAS 19:

• Short-term employee benefits;
• Post-employment benefits;
• Other long-term employee benefits; and
• Termination benefits.

The proposed standard also deals with a number of issues of specific relevance to the public sector, including:

• Determining the risk-free discount rate to be applied for discounting obligations arising from post-employment benefits;
• The treatment of post-employment benefits provided through composite social security programs; and
• Mechanisms for the orderly implementation of the proposed standard in the public sector.

This ED was developed in accordance with one of the IPSASB's key strategic aims: promoting convergence with International Financial Reporting Standards (IFRSs) where the requirements of IFRSs are applicable to the public sector. It is also critical to the IPSASB's work to improve the quality of financial information reported by public sector entities around the world.

How to Comment

The IPSASB has identified a number of issues of particular significance to the public sector and is particularly keen to obtain constituents' views on how the ED deals with these issues. Comment on these and other issues raised in the ED are requested by February 28, 2007. It may be viewed by going to https://www.ifac.org/EDs. Comments may be submitted by email to publicsectorpubs@ifac.org. They can also be faxed to the attention of the IPSASB Technical Director at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About IFAC

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC's current membership consists of approximately 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) is working to improve both the quality and uniformity of financial information reported by public sector entities around the world. In pursuit of this objective, the IPSASB has issued an exposure draft (ED) of a proposed International Public Sector Accounting Standard (IPSAS), ED 30, Impairment of Cash-Generating Assets. The majority of public sector entities globally operate for the purposes of delivering services to citizens.The IPSASB has already addressed assets which are held and operated primarily for the purposes of service delivery when it issued IPSAS 21, Impairment of Non-Cash-Generating Assets, in December 2004. ED 30 deals with cash-generating assets held and operated by public sector entities, which are not Government Business Enterprises.

"IPSAS 21 deals with the impairment of non-cash-generating assets and directed readers to International Accounting Standard 36 for guidance on the impairment of cash-generating assets. However, our constituents indicated that it would be useful if IPSASs included further guidance dealing with the impairment of cash-generating assets. The issuance of this proposed standard responds to that view," says IPSASB Chair Philippe Adhémar.

How to Comment

Comments on the ED are requested by February 28, 2007. It may be viewed by going to https://www.ifac.org/EDs. Comments may be submitted by email to publicsectorpubs@ifac.org. They can also be faxed to the attention of the IPSASB Technical Director at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About IFAC

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC's current membership consists of approximately 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

Canada is showing its support for the work of the International Public Sector Accounting Standards Board (IPSASB), an independent standard-setting body of the International Federation of Accountants (IFAC), in two significant ways: The Treasury Board of Canada is providing funding of US$200,000 per year for five years and the Canadian Institute of Chartered Accountants (CICA) has agreed to provide, at its expense, a dedicated professional to support the IPSASB. Beginning this month, some of the IPSASB's staff, including its new Technical Director, Stephenie Fox, will be located in an office in Toronto, Canada.

The IPSASB focuses on the accounting and financial reporting needs of national, regional and local governments, related governmental agencies, and the constituencies they serve through the development of high quality International Public Sector Accounting Standards. Canada's actions demonstrate the increasing recognition of the importance of these standards.

"These standards are the foundation for better, more transparent and more responsible financial reporting by government," states IFAC Chief Executive Ian Ball. "Citizens in all countries have a right to understand how the government manages the financial resources that have been entrusted to it. By addressing such issues as the application of accrual accounting to the public sector, or accounting for social policy obligations or for tax revenues, these standards help to enhance the accountability of governments."

"We very much appreciate the commitment of the Canadian Government and the CICA to the IPSASB. Together with our Canadian partners and others throughout the world, the IPSASB can continue to improve financial reporting in the public sector and thus contribute to better financial decision making and financial management by governments," states IFAC President Graham Ward, CBE, MA, FCA.

"The Canadian offer is significant in that it will strengthen the IPSASB's capacity to deal with its priorities on public sector specific issues, including public/private arrangements and a conceptual framework, as well as convergence with other standards," states Philippe Adhémar, IPSASB Chair. "An important IPSASB goal is to promote the acceptance and use of its standards worldwide, and significant progress has been made in this area. For example, the United Nations recently approved a resolution calling for its agencies to adopt the standards. The European Commission and Organisation for Economic Co-operation and Development have also adopted the standards, and the World Bank has indicated its support for their use by governmental entities."

"We are very pleased to have IPSASB based in Toronto. It is a huge vote of confidence in Canada's standard-setting abilities," says Kevin J. Dancey, FCA, CICA President and CEO. "It is through initiatives like this that the CA profession demonstrates its leadership and the increasingly important role it plays on the international stage in terms of establishing best practices and guidance for improved financial reporting."

For more information about the IPSASB and to download its standards and other guidance free-of-charge, visit its home page on the IFAC website at https://www.ifac.org/publicsector.

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. Its current membership consists of approximately 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets international standards of ethics, auditing and assurance, and education. It also issues guidance to encourage high-quality performance by professional accountants in business.

The General Assembly of the United Nations (UN) has approved a financial management reform program that calls for the adoption of International Public Sector Accounting Standards (IPSASs) by the UN. The adoption of IPSASs is viewed as critical to maintaining and enhancing the credibility, transparency, and authority of the financial processes and transactions of the United Nations.

"The reform program enables, for the first time, the UN and its many agencies to have a comprehensive and consistent view of their financial position and performance. This will, in turn, enable the UN to manage more effectively, and to be fully accountable for, the resources entrusted to it," states IFAC President Graham Ward.

IPSASs are developed by the International Public Sector Accounting Standards Board, an independent standard-setting body within the International Federation of Accountants (IFAC). The standards set out the requirements for financial reporting by governments and other public sector organizations. The standards may be downloaded from the IFAC website at https://www.ifac.org/store.

As a result of the UN's decision to use IPSASs, the UN will move from a system of modified accrual to full accrual, which provides a more comprehensive financial picture.

Chief Executive Ian Ball states: "Public sector entities, such as the United Nations, that have undertaken a financial management reform program incorporating full accrual financial reporting are better able to manage their finances, and demonstrate by their actions their commitment to transparency."

The President of the United Nations General Assembly, H.E. Mr. Jan Eliasson, issued a Statement on the Adoption of the Resolution on Management Reform in which he said: "...We have taken a step to make the Organization more efficient and effective. We have begun consolidating a culture of accountability, transparency and integrity in the Secretariat (of the UN)."

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC's current membership consists of approximately 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting public sector accounting standards through the IPSASB, IFAC, through its independent standard-setting boards, also sets international standards on ethics, auditing and assurance, and education. It also issues guidance to encourage high-quality performance by professional accountants in business.