Improvements to IPSAS, 2021

The International Public Sector Accounting Standards Board (IPSASB) published Exposure Draft (ED) 80 on Improvements to IPSAS, 2021 in 2021, and considered the comment received from stakeholders at the December 2021 meeting.

See a previous article on the key proposals in ED 80.

What did stakeholders say?

The Accounting Standards Board (ASB) published this ED concurrently and submitted a comment letter with the views of local stakeholders to the IPSASB. The IPSASB considered our feedback together with feedback from other constituents. Generally, constituents were supportive of the proposals.

The ED was approved with the following decisions taken based on stakeholder feedback:

Interest-rate benchmark reform

Concerns were raised about the magnitude and significance of  proposed changes as part of the Improvements. The IPSASB agreed to publish these amendments as part of Improvements to IPSAS, 2021 and  to ensure there is sufficient communication to stakeholders about these amendments.

Classification of liabilities as current or non-current in IPSAS 1 on Presentation of Financial Statements

Stakeholders noted that the International Accounting Standards Board (IASB) published an Exposure Draft on Non-current Liabilities with Covenants (proposed amendments to IAS 1), which impacts the proposals in Improvements to IPSAS, 2021. For this reason, the IPSASB agreed to delete the proposals from the Improvements to IPSAS, 2021.

Public sector reasons to depart?

Stakeholders raised concerns with the proposals on:

• cost of fulfilling an onerous contract in IPSAS 19 on Provisions, Contingent Liabilities and Contingent Assets, as the proposals would pose practical difficulties for preparers; and
• proceeds from selling items produced before the asset is available for use in IPSAS 17 on Property, Plant and Equipment, as the proposals appear inconsistent with other requirements in IPSAS on borrowing costs and cost of an asset.

The IPSASB approved these proposals in Improvements to IPSAS, 2021 unamended as there were  no public sector-specific reasons for departing from the related amendments made by the IASB. The IPSASB agreed to work on principles for identifying public sector-specific reasons to depart in future.

Click here for access to the feedback from constituents.

What is next?

The Improvements to IPSAS, 2021 is expected to be published in January 2022 and will be effective as follows:

• Interest-rate benchmark reform related amendments: 1 January 2022.
• Other amendments: 1 January 2023.

Disclaimer

The article has been prepared by the Secretariat of the ASB for information purposes only. It has not been reviewed, approved, or otherwise acted on by the Board.