The IPSASB has published Exposure Draft 73, Covid-19: Deferral of Effective Dates, which proposes to delay the effective dates of recently published Standards and Amendments to IPSAS by one year to January 1, 2023. Responding to the global COVID-19 pandemic and the challenges it has created, the purpose of this Exposure Draft is to provide stakeholders with additional implementation time.
The Standards and Amendments which are impacted include:
IPSAS 41, Financial Instruments;
IPSAS 42, Social Benefits;
Long-term Interests in Associates and Joint Ventures (Amendments to IPSAS 36) and Prepayment Features with Negative Compensation (Amendments to IPSAS 41);
Collective and Individual Services (Amendments to IPSAS 19); and
Improvement to IPSAS, 2019.
The IPSASB welcomes comments on the Exposure Draft by August 15, 2020.
The IPSASB has published Exposure Draft 73, Covid-19: Deferral of Effective Dates, which proposes to delay the effective dates of recently published Standards and Amendments to IPSAS by one year to January 1, 2023.
The IPSASB held its first ever virtual meeting on June 4, June 23-26 and June 30, 2020. This was the second IPSASB meeting of 2020.
Conceptual Framework - Limited Scope Review
The IPSASB approved a measurement hierarchy distinguishing Measurement Models, Measurement Bases and Measurement Techniques.
Historical Cost, Fair Value, Current Cost and Fulfillment Value (or Cost of Fulfillment) will be defined as bases.
Market Value and Replacement Cost will be defined as techniques.
The IPSASB will consider additional bases, including Value in Use and Cost of Release, in September. The selection of measurement bases will be linked to the Framework’s measurement objective.
Measurement
The IPSASB considered issues raised by constituents related to measurement bases identified in the Measurement Consultation Paper (CP). These foundational discussions, along with those in the related Conceptual Framework project, will shape the draft Measurement Exposure Draft (ED) that will be reviewed in September.
The IPSASB also discussed the impact of applying the CP Measurement definition of fair value across IPSAS and concluded that no change in terminology is required for the majority of IPSAS where the term fair value is currently applied.
Infrastructure
The IPSASB agreed “networks or systems” and “long useful lives” should be included as characteristics of Infrastructure Assets in IPSAS 17, Property, Plant and Equipment. These characteristics distinguish Infrastructure Assets from general property, plant, and equipment and present complexities in the application and implementation of existing principles in the Standard. Illustrative Examples and/or Implementation Guidance will be developed for September 2020 to help provide clarity.
Heritage
The IPSASB agreed “irreplaceable,” “restrictions,” and “long and sometimes unspecified useful lives” should be included as characteristics of Heritage Assets in IPSAS 17. These characteristics distinguish Heritage Assets from other property, plant, and equipment and present complexities in the application and implementation of existing principles in the Standard.
The IPSASB also approved the removal of the heritage assets scope exclusion from IPSAS 17.
Accounting for Non-Current Assets Held for Sale and Discontinued Operations
The IPSASB approved the Project Brief for the project to develop a standard aligned with IFRS 5, Accounting for Non-current Assets Held for Sale and Discontinued Operations. The IPSASB also agreed to add additional public sector disclosure requirements on the fair value of assets classified as held for sale to enhance transparency and accountability.
Leases
The IPSASB reviewed the draft Basis for Conclusion related to the history of the Leases project. The IPSASB decided to align with IFRS 16, Leases in the development of Exposure Draft on Leases. However, it also decided to exclude the IFRS 16 manufacturer or dealer lessor requirements because these are not expected to be applicable in the public sector. The IPSASB considered the structure and content of the Request for Information that will be developed for publication together with the Exposure Draft on Leases to gather information on transactions and arrangements similar to leases.
Next Meeting
The next meeting of the IPSASB will take place in September, 2020. For more information, or to register as an observer, visit the IPSASB website (www.ipsasb.org).
00:00 Welcome and introduction: Ross Smith, IPSASB Program & Technical Director 00:39 Chair’s meeting overview: Ian Carruthers, IPSASB Chair 03:10 Conceptual Framework-Limited Scope Update and Measurement projects: Ian Carruthers, IPSASB Chair 09:25 Update IPSAS 17 and the related Heritage Assets and Infrastructure Assets projects: Ian Carruthers, IPSASB Chair 12:49 Closing remarks: Ross Smith, IPSASB Program & Technical Director
The Paper, which sets forth a series of recommendations to enhance the process by which global audit, assurance and ethics standards for the accountancy profession are developed and issued in the public interest, was the result of a lengthy, multi-stakeholder consultation process.
IFAC is pleased that the Paper recognizes the important and necessary role that IFAC and the profession will continue to play in the standard setting process and that the recommendations are aligned with IFAC’s strategy. There are, however, a number of important issues still to be addressed before moving forward with implementation. While IFAC does not underestimate the challenges this presents, we remain confident that we will be able to work collaboratively with all key stakeholders involved to reach a satisfactory resolution during the transition planning phase.
Dr. In-Ki Joo, President of IFAC, said, “We have worked hard to build trust and collaborate with all of the stakeholders involved in this process. The recommendations provide us with a foundation to move forward. We look forward to working with the Monitoring Group and all other stakeholders involved in the transition planning phase to agree on an implementation plan.”
Kevin Dancey, CEO of IFAC, said, “Global audit, assurance and ethics standards are the bedrock on which our profession is built, and an important safeguard in protecting the public interest that is part of our professional mandate. We were pleased to have worked with the Monitoring Group, the Public Interest Oversight Board and other key stakeholders over the course of the consultation period to continue to enhance a sustainable, independent and transparent standard-setting process that has the trust and confidence of all stakeholders.”
The IAASB (International Auditing and Assurance Standards Board) and the IESBA (International Ethics Standards Board for Accountants) are responsible for developing in the public interest and through independent due process the standards that govern how auditors and professional accountants deliver their services. IFAC’s key strategic priorities include supporting IAASB and IESBA and advocating for, promoting and monitoring the adoption and implementation of their standards.
About IFAC IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of more than 175 members and associates in more than 130 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.
