21 April 2016

IFAC: IPSASB publishes the applicability of IPSASs

The IPSASB has published The Applicability of IPSASs and a revised Preface to International Public Sector Accounting Standards (Preface), which change how the IPSASB communicates the type of public sector entities that it considers when developing an IPSAS or Recommended Practice Guideline (RPG).

Until now, IPSASs and RPGs have included a definition of a Government Business Enterprise (GBE) and a statement that GBEs apply International Financial Reporting Standards. The definition of a GBE has proved ambiguous in places and difficult for preparers to interpret.

The main amendments:

-       Provide the characteristics of public sector entities for which IPSAS are designed in the revised Preface;

-       Replace the term “GBEs” with the term “commercial public sector entities;”

-       Delete the definition of a GBE in IPSAS 1, Presentation of Financial Statements; and

-       Amend the scope section of each IPSAS and RPG by removing the paragraph that states that these pronouncements do not apply to GBEs.

These amendments address constituents’ concerns about the application of IPSASs to public sector entities and different interpretations of the GBE definition. 

“This principles-based approach communicates more transparently the types of public sector entities that the IPSASB considers when developing IPSASs and RPGs,” said IPSASB Chair Ian Carruthers. “As this approach is drawn from The Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities it enhances the consistency and understandability of the IPSASB’s literature.”

“These changes also acknowledge the role that regulators have in determining which accounting standards should be applied by different entities in their jurisdictions,” Mr. Carruthers added.

To support constituents’ understanding of these amendments, a marked-up and a clean version of the Preface have been made available on the IPSASB website. The IPSASB encourages IFAC member organizations, associates, and regional accountancy organizations to promote the availability of these documents to their members and employees.

Full press release

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