The IPSASB's Biennial Review, Delivering in an Evolving Environment, summarizes the Board’s successes, challenges, and key outputs during 2021 and 2022 in the context of its Strategy and Work Program 2019-2023.
IPSASB Staff issued this Q&A to provide insights into the reasons for developing the Conceptual Framework, the development process, its role, its update and its relationship with the IASB’s Conceptual Framework.
The International Public Sector Accounting Standards Board® (IPSASB®), developer of IPSAS®, international accrual-based accounting standards for use by governments and other public sector entities around the world, has published an updated chapter of its Conceptual Framework, which establishes the concepts that are applied in developing IPSAS and Recommended Practice Guidelines (RPGs) and are applicable to the preparation and presentation of public sector entities’ general purpose financial reports. The Conceptual Framework enables the IPSASB to ensure the consistency of its standard-setting by strengthening the linkage between IPSASs. Additionally, the transparency of the concepts underpinning the development of IPSASs and RPGs enhances the IPSASB’s accountability.
The updated chapter, Chapter 3, Qualitative Characteristics, completes the limited scope project to improve its Conceptual Framework for Financial Reporting by Public Sector Entities, which also included:
Chapter 5, Elements in Financial Statements
Chapter 7, Measurement of Assets and Liabilities in Financial Statements
The updated chapters have been informed by the IPSASB’s experience using the Conceptual Framework since its approval in 2014, and by global developments, notably the International Accounting Standards Board’s publication of a revised Conceptual Framework for Financial Reporting in 2018.
“As the IPSASB enters its next strategic phase, the Conceptual Framework will continue to be a cornerstone of the IPSASB’s literature,” said IPSASB Chair Ian Carruthers. “These changes strengthen the Conceptual Framework and reinforce its relevance to both our financial reporting and new sustainability reporting activities.”
The updated Chapter 3 includes guidance on prudence, which is not a separate qualitative characteristic in its own right and adds ‘obscuring’ information to ‘misstating’ and ‘omitting’ information as a factor relevant to materiality judgments. The addition of ‘obscuring’ is an acknowledgement that, for example, voluminous disclosures of immaterial items can have an adverse impact on the usefulness of financial reports.
The updated Chapter 5 includes revised definitions of an asset and a liability. Guidance on these definitions has been restructured to better align with the components of the definitions, making it more user-friendly. There are also new sections on unit of account and executory contracts that are equally unperformed by both parties.
The IPSASB has fully revised Chapter 7 to streamline measurement concepts by eliminating unused measurement bases and focusing on the most commonly used measurement bases. The new subsequent measurement framework explains how the various measurement components applied to estimate the value of an asset or liability interact.
The updated chapters of the Conceptual Framework became effective for the IPSASB when published.
About the IPSASB
The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the government of Canada. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.
About the Public Interest Committee
The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.
Conceptual Framework updates are effective when published. They are non-authoritative.
The International Public Sector Accounting Standards Board® (IPSASB®), developer of IPSAS®, international accrual-based accounting standards for use by governments and other public sector entities around the world has opened a consultation to hear stakeholder feedback on its proposed strategy and work program for the next five years.
The IPSASB’s work during 2019-2023 has addressed key gaps in the IPSAS literature which now allows for a rebalancing of its Financial Reporting Work Program towards the maintenance of IPSAS. The IPSASB proposes to put a post-implementation review process in place and to establish an Application Panel to support not only existing IPSAS users but the much larger group of stakeholders expected to be using the IPSASB Standards by 2030. The new strategy assumes that the IPSASB moves ahead with its decision to develop International Public Sector Sustainability Reporting Standards, an initiative begun in 2023 to help equip governments and other public sector entities to provide better transparency, accountability, and comparability of their efforts to combat the climate crisis and other sustainability challenges.
The proposed strategic objective of the IPSASB’s Strategy and Work Program 2024-2028 is:
Strengthening Public Financial Management and sustainable development globally through increasing adoption and implementation of accrual IPSAS and International Public Sector Sustainability Reporting Standards.
"Having achieved so much during the 2019-2023 Strategy period, despite the major challenges we have all faced, the IPSASB has reached an inflection point,” said IPSASB Chair Ian Carruthers. “This exciting new phase of the IPSASB’s work will build on the hard work of the Board to implement the current strategy, as well as the sustained input from all our stakeholders.”
This Consultation provides an opportunity for constituents to comment on the IPSASB’s proposed Strategic Objective, and the two main activities to deliver on the Strategic Objective. In addition to the proposed new maintenance activities and the priorities for these, constituents are also asked to comment on potential future Financial Reporting Work Program priorities, and what the key public sector sustainability reporting issues are the IPSASB should consider adding to its Work Program. Stakeholders should submit responses by February 15, 2024 to ensure their views are considered.
How to Comment To access the Consultation and its summary At-a-Glance document, or to submit a comment, visit the IPSASB website. Comments are requested by February 15, 2024. The IPSASB encourages IFAC member organizations and regional accountancy organizations to promote the availability of this Consultation to their members and employees.
About the IPSASB The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the government of Canada. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.
About the Public Interest Committee The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.
