|
|
The proposed new Standard will replace IPSAS 29, Financial Instruments: Recognition and Measurement, and improves that Standard’s requirements by introducing:
- Simplified classification and measurement requirements for financial assets;
- A forward looking impairment model; and
- A flexible hedge accounting model.
Accounting for financial instruments is an important but complex area for most governments. Although our existing standard IPSAS 29 includes guidance on a number of topics specific to the public sector, it is converged with the previous IFRS®” said IPSASB Chair Ian Carruthers. “Through incorporating the improvements in IFRS 9 financial reporting will be improved by ED 62.”
The IPSASB applied its Process for Reviewing and Modifying IASB Documents, to align ED 62 with IFRS 9, and includes appropriate public sector specific modifications. This approach builds on public and private sector best-practice while addressing unique public sector features. ED 62 includes public sector specific guidance on financial guarantees issued through non-exchange transactions and concessionary loans and examples illustrating how to apply the principles in ED 62 to transactions that are unique to the public sector.
Comments on the Consultation Paper are requested by December 31, 2017.