1. Orientation Session on International Public Sector Accounting Standards (IPSAS) September 1, 2009

2. What is IPSAS and Why Adopt It UN Board of Auditors considers the implementation IPSAS as the single most important aspect in the UNs Management Reform (letter to the Secretary General, December 2008) What is IPSAS: set of independently developed accounting standards considered as best practice for the public sector organizations Used to define the presentation of financial statements Why IPSAS: Provide consistent application of accounting principles throughout the UN system UNSAS unable to keep pace with changing accounting developments or methodologies Improves accountability and transparency through IPSAS compliant financial statements

3. What is IPSAS and Why Adopt It Why IPSAS (continue): Improves the extent to which financial policies, regulations and rules, business practices and procedures respond to the needs of the organization

4. What is IPSAS and Why Adopt It International Public Sector Accounting Standards (IPSAS) – IPSAS « target » is not a specific country or international organization. IPSAS is « worldwide ». – At least 70 countries have either adopted or are in process of adopting IPSAS for part or all of their public sectors – Most of the international organizations are taking IPSAS as a reference

5. What is IPSAS and Why Adopt It International Public Sector Accounting Standards (IPSAS) – IPSAS is developed by Public Sector for Public Sector. – IPSAS is based on IFRS (accounting standards for private sector) but is adapted (when necessary) to Public sector specificities – Examples of specificities are: taxes (for governments), contributions from member countries (for international organization) or grants

6. What is IPSAS and Why Adopt It International Public Sector Accounting Standards (IPSAS) – IPSAS is focused on accounting and is not for budget. Similar to IPSAS, accounting standards are for example US GAAP for US companies, IFRS for European companies – IPSAS has 26 standards (2 volumes, 1200 pages) IPSAS 1. Presentation of Financial Statements IPSAS 2. Cash Flow Statements IPSAS 3. Accounting Policies, Changes in Accounting Estimates and Errors IPSAS 4. The effects of changes in Foreign Exchange rates IPSAS 5. Borrowing costs IPSAS 6. Consolidated Financial Statements and Accounting for Controlled Entities IPSAS 7. Investments in associates IPSAS 8. Financial reporting in Joint Ventures IPSAS 9. Revenue from Exchange Transactions IPSAS 10. Financial Reporting in Hyperinflationary Economies IPSAS 11. Construction contract IPSAS 12 Inventories IPSAS 13 Leases IPSAS 14 Events After the Reporting Date IPSAS 15. & IAS 39 Financial Instruments IPSAS 16. Investment property IPSAS 17. Property, plant & Equipment IPSAS 18. Segment Reporting IPSAS 19. Provisions, contingent liabilities & contingent assets IPSAS 20. Related party disclosures IPSAS 21. Impairment of Non Cash-generating assets IPSAS 22. Disclosure of financial information about the general government sector IPSAS 23. revenue from non-exchange transactions IPSAS 24 Presentation of budget information in financial statements IPSAS 25 Employee benefits IPSAS 26 Impairment of Cash-generating assets IAS 38 Intangible Assets

7. Standard Setting Process

8. IPSAS Project Governance Structure & Working Groups

9. Application of IPSAS in the UN IPSAS Deals with concepts, definitions and accounting principles UN System Wide Approved Policies and Guidance PPE Management & oversight Detailed Procedures, Guidelines and Manuals for PPE management Accounting and Finance Accounting Manuals Further decisions on accounting policies Chart of accounts and respective posting rules (the debits and credits) Organization Specific UN System Wide Configured/Integrated IT systems: fixed asset register, procurement module (supply chain) & finance module

10. Presentation of Material

11. Delivery Principle for Good and Services Under UNSAS - expenditures are recorded when a PO for goods or a contract for services is issued. Under IPSAS - expenses are recorded when goods are received or consumed, where control has been transferred or services rendered. - effectively eliminates encumbrances accounting - more in line with results based management - tightens procurement practices - less POs brought forward to following year