International Public Sector Accounting Standards Board (IPSASB) Update on Activities Mike Hathorn Chair IPSASB

IFAC IPSASB 2IPSASB UPDATE Overview BackgroundBackground IPSASB Strategic ThemesIPSASB Strategic Themes Project Updates – Present and FutureProject Updates – Present and Future

IFAC IPSASB 3IPSASB UPDATE IPSASB Standing Board within IFACStanding Board within IFAC Develops International Public Sector Accounting Standards (IPSASs) – accrual and cashDevelops International Public Sector Accounting Standards (IPSASs) – accrual and cash Supported by the Canadian Government and CICA, NZ and Swiss Governments, World Bank, UN Group, ADB.Supported by the Canadian Government and CICA, NZ and Swiss Governments, World Bank, UN Group, ADB. Technical Director and 3 staff Toronto based, 1 New York, 1 Melbourne and 1 UKTechnical Director and 3 staff Toronto based, 1 New York, 1 Melbourne and 1 UK Rolling secondment from Chinese Ministry of FinanceRolling secondment from Chinese Ministry of Finance

IFAC IPSASB 4IPSASB UPDATE IPSASB Process 18 Members (3 Public Members)18 Members (3 Public Members) Meets 3 times per yearMeets 3 times per year 4 day meetings which may include a regional seminar and/or a consultative group meeting.4 day meetings which may include a regional seminar and/or a consultative group meeting. Open to the publicOpen to the public All materials publicly available – posted on internetAll materials publicly available – posted on internet

IFAC IPSASB 5IPSASB UPDATE Developing Standards Accrual based standardsAccrual based standards Convergence with IFRSs unless public sector specific reason for departure – Rules of the RoadConvergence with IFRSs unless public sector specific reason for departure – Rules of the Road Public sector specific standardsPublic sector specific standards Current hierarchy – where no IPSAS exists consider IASB standards or national standardsCurrent hierarchy – where no IPSAS exists consider IASB standards or national standards Task Force to review Cash-basis IPSASTask Force to review Cash-basis IPSAS

IFAC IPSASB 6IPSASB UPDATE Transparent Due Process Exposure drafts: at least 4 months for commentExposure drafts: at least 4 months for comment Analyses of submissionsAnalyses of submissions Sub Committees, Task Forces, Project Advisory Panels (PAP)Sub Committees, Task Forces, Project Advisory Panels (PAP) Consultative GroupConsultative Group

IFAC IPSASB 7IPSASB UPDATE Available on the IPSASB Web Site: All IPSASs (26 accrual plus 1 cash basis)All IPSASs (26 accrual plus 1 cash basis) –(including Spanish and French translations) All current Exposure Drafts and other publicationsAll current Exposure Drafts and other publications IPSASB Updates on most recent IPSASB meetingsIPSASB Updates on most recent IPSASB meetings IPSASB meeting papers (before each meeting)IPSASB meeting papers (before each meeting) Project historiesProject histories FREE OF CHARGE AT:

IFAC IPSASB 8IPSASB UPDATE Strong Evidence of Progress UN System (28 bodies)UN System (28 bodies) OECD, NATO (21 bodies), EC, IFAC, INTERPOLOECD, NATO (21 bodies), EC, IFAC, INTERPOL Almost 70 countries have agreed processes or have a project in place to adopt IPSASs or align with IPSASsAlmost 70 countries have agreed processes or have a project in place to adopt IPSASs or align with IPSASs

IFAC IPSASB 9IPSASB UPDATE Disclosures by recipients of external assistance Aims to harmonize/reduce compliance costsAims to harmonize/reduce compliance costs Requested by OECD/multi-laterals/bi-lateralsRequested by OECD/multi-laterals/bi-laterals Approved at Beijing meeting and incorporated into cash basis IPSAS in early 2008Approved at Beijing meeting and incorporated into cash basis IPSAS in early 2008

IFAC IPSASB 10IPSASB UPDATE Strategic Themes Conceptual framework for public sectorConceptual framework for public sector Public sector specific issues including convergence with statistical bases where appropriatePublic sector specific issues including convergence with statistical bases where appropriate IFRS convergence – Rules of the RoadIFRS convergence – Rules of the Road Promotion & communicationPromotion & communication

IFAC IPSASB 11IPSASB UPDATE Conceptual Framework Group 1 Consultative Document topics to be considered in March 2008 as one document – Objectives, Reporting Entity, Scope and Qualitative CharacteristicsGroup 1 Consultative Document topics to be considered in March 2008 as one document – Objectives, Reporting Entity, Scope and Qualitative Characteristics Final review June 2008Final review June 2008 Group 2 topics to be considered in June 2008.Group 2 topics to be considered in June 2008.

IFAC IPSASB 12IPSASB UPDATE Social Benefits : Current Approach ED 34: Disclosure of Cash Transfers to Individuals or HouseholdsED 34: Disclosure of Cash Transfers to Individuals or Households –requires disclosure of amounts expected to be transferred to eligible individuals or households (not recognition and measurement) –ED 34 approved in principle at Beijing meeting Consultation Paper on Social Benefits: Key Issues in Recognition and MeasurementConsultation Paper on Social Benefits: Key Issues in Recognition and Measurement –approved in late February Initiation of project on long-term fiscal sustainabilityInitiation of project on long-term fiscal sustainability –project brief will be made publicly available

IFAC IPSASB 13IPSASB UPDATE Service Concessions IFRIC 12: Service Concession Arrangements issued: November 2006 Operators only not grantors so limited direct applicability in public sectorOperators only not grantors so limited direct applicability in public sector Based on controlBased on control IPSASB Project: Sub Committee supported by US GASB Staff Not constrained by existing accounting guidance/approachesNot constrained by existing accounting guidance/approaches Consultation Paper: for approval in March 2008Consultation Paper: for approval in March 2008 Possible accounting approaches:Possible accounting approaches: ControlControl Risks and rewardsRisks and rewards Reversion of assetReversion of asset

IFAC IPSASB 14IPSASB UPDATE IFRS Convergence Convergence strategy to update to IASB Standards as at December 2008 by December 2009Convergence strategy to update to IASB Standards as at December 2008 by December 2009 IPSAS 25, Employee BenefitsIPSAS 25, Employee Benefits IPSAS 26, Impairment of Cash-Generating AssetsIPSAS 26, Impairment of Cash-Generating Assets

IFAC IPSASB 15IPSASB UPDATE Rules of the Road: Purpose (1) Codify when divergence from IFRS is appropriateCodify when divergence from IFRS is appropriate Clear statement of how IPSASB decides whether to depart from IFRS and when to initiate public sector specific projectClear statement of how IPSASB decides whether to depart from IFRS and when to initiate public sector specific project Approved at Beijing meetingApproved at Beijing meeting Test during 2008 before going on websiteTest during 2008 before going on website

IFAC IPSASB 16IPSASB UPDATE Rules of the Road : Key Steps(2) Step One: Are there public sector issues that warrant departure?Step One: Are there public sector issues that warrant departure? Step Two: Are the departures so significant that a public sector specific project should be initiated?Step Two: Are the departures so significant that a public sector specific project should be initiated? Step Three: Modify IASB documents.Step Three: Modify IASB documents. Step Four: Issue IPSASStep Four: Issue IPSAS

IFAC IPSASB 17IPSASB UPDATE Other IFRS Convergence Topics Financial Instruments Update IPSAS 15 on presentation to converge with IAS 32Update IPSAS 15 on presentation to converge with IAS 32 Develop IPSAS on disclosure based on IFRS 7Develop IPSAS on disclosure based on IFRS 7 Issues Paper to be considered at March 2008 meetingIssues Paper to be considered at March 2008 meeting Aim to issue ED later in 2008Aim to issue ED later in 2008 Foreign Exchange Update IPSAS 4 (ED 33 released July 2007)Update IPSAS 4 (ED 33 released July 2007) Borrowing Costs Update IPSAS 5Update IPSAS 5

IFAC IPSASB 18IPSASB UPDATE Topics in work plan for 2008 and 2009 Entity combinations Intangible assets Financial instruments – recognition and measurement Fair Value Managements Discussion & Analysis (MD&A)/Narrative Reporting Performance Reporting Further consideration of work plan at March 2008 meeting

International Federation of Accountants