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Eurostat Norwegian association for local government auditing Brussels, 15 January 2015 Towards European Public Sector Accounting Standards (EPSAS) Alexandre.

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Presentation on theme: "Eurostat Norwegian association for local government auditing Brussels, 15 January 2015 Towards European Public Sector Accounting Standards (EPSAS) Alexandre."— Presentation transcript:

1 eurostat Norwegian association for local government auditing Brussels, 15 January 2015 Towards European Public Sector Accounting Standards (EPSAS) Alexandre M AKARONIDIS Head of Unit Task Force EPSAS, European Commission - Eurostat

2 eurostat Why harmonised accruals? 2/14 From an EU perspective the wide range of public sector accounting standards result in a lack of: transparency, and comparability in the financial reporting due to non-comparable, incomplete and inconsistent primary accounting data. This impacts on both General Purpose Financial Statements and Government Finance Statistics.

3 eurostat 3/14

4 eurostat EY Study (2012) public sector accounting standards in the EU 4/14

5 eurostat Background: 2012 to mid-2013 Study on the suitability of IPSAS: Retrospective 5/14 Budgetary Frameworks Directive  "… the Commission shall assess the suitability of the International Public Sector Accounting Standards for the Member States" Public consultation on IPSAS Task Force IPSAS E&Y study on public sector accounting and auditing practices Report on suitability of IPSAS  IPSAS cannot easily be implemented in EU Member States as it stands currently  IPSAS would be a suitable starting point for the future development of a set of European Public Sector Accounting Standards EPSAS Conference

6 eurostat Public consultation – suitability of IPSAS Are IPSASs suitable for implementation in the EU Member States? NB: "NO" replies were concentrated - from a small number of MSs (DE, FR, AT, NL, PL) YesNoPartlyUncertainTotal Professional Association/Standard Setter Ministry of Finance/Treasury Private individual Regional Audit Office 81 9 National Audit Office Firm of Auditors or Accountants 5 5 Statistical Office Regional association or authority 21 3 Social security/Pension Fund 12 3 International Organisation 1 1 National authority 1 1 TOTAL % share /14

7 eurostat Impact Assessment Legislative proposal Outputs from: TF EPSAS Governance Taking forward EPSAS: mid onwards TF EPSAS Standards Public consultation on EPSAS governance PwC study on behalf of Eurostat Commission Communication 7/14

8 eurostat Staged approach to EPSAS – outline (June 2014) 8/14

9 eurostat IPSAS 1 – Presentation FS IPSAS 2 – Cash flow IPSAS 3 – Fundamental errors and changes in policies IPSAS 4 – Changes in foreign exchange rates IPSAS 5 – Borrowing costs IPSAS 9 – Revenue from exchange transactions IPSAS 10 – Hyperinflation­ary economies IPSAS 11 – Construction contracts IPSAS 12 – Inventories IPSAS 14 – Events after the reporting date IPSAS 16 – Investment property IPSAS 19 – Provisions, con­tingent liabilities, contingent assets IPSAS 27 – Agriculture IPSAS 32 – Service concessions 9/14 IPSAS study (2013) - Minor or no adaption

10 eurostat IPSAS 7 – Investments in associates IPSAS 8 – Interests in joint ventures IPSAS 13 – Leases IPSAS 15 – Financial instruments: Presentation IPSAS 17 – Property, plant and equipment IPSAS 18 – Segment report­ing IPSAS 20 – Related party disclosures IPSAS 21 – Impairment of non-cash- generating assets IPSAS 22 – Disclosure general government sector IPSAS 23 – Revenue from non-exchange transactions IPSAS 24 – Presentation of budget information IPSAS 25 – Employee benefits IPSAS 26 – Impairment of cash-generating assets IPSAS 31 – Intangible assets 10/14 IPSAS study (2013) - Adaption or selective approach

11 eurostat IPSAS 6 – Consolidated financial statements IPSAS 28 – Financial instruments: Presentation IPSAS 29 – Financial instruments: Recognition and measurement IPSAS 30 – Financial instruments: Disclosure 11/14 IPSAS study (2013) - Needing amendment

12 eurostat Technical analysis of IPSAS confirms: The general technical suitability of existing IPSAS Classification of IPSASs in 3 categories for the future effective and efficient work on EPSAS High level cost estimate of EPSAS implementation Potential costs between 0.01% and 0.05 % of GDP Benefits would outweigh costs 12/14 PwC Study on behalf of Eurostat (2014)

13 eurostat PwC Study on behalf of Eurostat (2014) 13/14 Extrapolated costs at EU level spread over the reform period Scenario 1 – Adaptation of all existing IT systems between 1.2 billion and 2.1 billion EUR Scenario 2 – New IT systems for all entities with low IT maturity between 1.8 billion and 6.9 billion EUR IPSAS report (2013):costs of % of GDP PwC Study (2014): costs of % of GDP NB: To interpret with due care, taking into account the inherent limitations of such extrapolations.

14 eurostat European Commission (Eurostat) Task Force EPSAS: statistics/government-accounting


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