IPSASB eNews: October 2018
The IPSASB discussed a draft ED, Collective and Individual Services and Disaster Relief, proposing additional guidance to IPSAS 19, Provisions, Contingent Liabilities and Contingent Assets. The IPSASB agreed to include relevant definitions in IPSAS 19, and decided that the ED should cover emergency relief more broadly, not just disaster relief.
The IPSASB decided that the Public Sector Performance Obligation Approach could be applied to non-exchange grants and transfers. Staff will further consider when a liability should be recognized, what constitutes enforceability and develop examples.
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The IPSASB discussed the responses to ED 65, Improvements to IPSAS, 2018. The IPSASB agreed to most of the amendments proposed in ED 65, with little or no change. However, the IPSASB agreed to amend paragraph 76 of IPSAS 16, Investment Property, to provide guidance on measuring investment property under construction at fair value initially, rather than deleting the paragraph as proposed in the ED. The IPSASB also agreed to an effective date of January 1, 2021 for the new cash flow disclosure added to IPSAS 2, Cash Flow Statements. The IPSASB approved Improvements to IPSAS, 2018.
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The IPSASB decided on the approach for development of Exposure Draft (ED), Measurement. The ED will define major measurement bases and provide guidance on, and how to derive measures, under these bases. Individual IPSAS will specify where these measurement bases are to be used. Next steps include development of application guidance for historical cost, replacement cost, fair value, and the cost of fulfillment and identification of generic measurement-related disclosures. The majority of the text of IFRS 13, Fair Value Measurement, will be adopted as application guidance in IPSASB’s literature. The IPSASB also further developed the Consultation Paper (CP), Public Sector Measurement.
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The IPSASB considered the terminology in IFRS 15, Revenue from Contracts, from a public sector perspective. The IPSASB decided that the term ‘binding arrangement’ should replace ‘contract’. However the terms ‘consideration and exchange’ and ‘goods and services’ will be retained. Staff will provide alternatives to ‘customer’. Explanatory text will note that the ‘expected cost plus margin method’ for estimating stand-alone selling prices can be used for goods and services that are provided on a cost-recovery basis. The Board decided that the ability to reduce future funding would be included as a potential enforcement mechanism.
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The IPSASB considered the responses to ED 64, Leases for the first time. There was overall support for ED 64’s proposal for the ‘right-of-use model’ on lessee accounting. The IPSASB tentatively decided to adopt the model in the IPSAS on Leases. The IPSASB acknowledged the diversity and complexity of constituents’ views on the proposals on lessor accounting and concessionary leases and decided to extend the timeline of the project in order to allow a detailed discussion of all the issues raised by respondents.
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The IPSASB supported the approach, which its Financial Instruments Task Force is following for Public Sector Specific Financial Instruments. This involves the development of non-authoritative guidance in the core Financial Instruments standards where the transaction meets the definition of a financial instrument in IPSAS 41, Financial Instruments, and non-authoritative guidance outside the core Financial Instruments standards where that definition is not met. Following a face-to-face Task Force meeting in October 2018, Task Force recommendations will be presented to the IPSASB at future meetings.
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The 2018 Handbook of International Public Sector Accounting Pronouncements is now available for electronic download on the IPSASB website. The 2018 Handbook includes the revised Cash Basis IPSAS. Hard copy editions will be available for purchase in November.
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The IPSASB discussed feedback received on the Strategy and Work Plan 2019-2023 consultation; including input from the four regional roundtables and the 53 formal comment letters submitted. Overall, the IPSASB concluded that the inclusive approach followed in developing the consultation proposals, and the open outreach process using roundtables during the consultation period, have contributed to the strong support for key proposals. The IPSASB will continue to work to finalize the Strategy and Work Plan 2019-2023 by discussing it with the Consultative Advisory Group and The Public Interest Committee over the next month, and will look to approve the Strategy and Work Plan at its December 2018 meeting.
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The IPSASB seeks nominations from individuals, or representatives from organizations, interested in serving as a member of the IPSASB Consultative Advisory Group (CAG). Nominations are due by October 31, 2018. More information on the role of the CAG and the types of skills and experience nominees should have can be found here: https://www.ipsasb.org/cagnom
A podcast highlighting key points of the September 2018 meeting is now available:
Good progress was made on the landmark Social Benefits IPSAS with a view to approval in December. The IPSASB made important decisions on disclosures, including to require a breakdown of expenditure on material schemes, narrative about whether a scheme meets the insurance accounting criteria, and a description of the demographic and economic factors that influence the expenditure on a scheme. The Obligating Event approach has been renamed the General Approach.
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