The article published on 14 July 2026 : IPSAS Presentation: What do financial statements communicate to users? – ASB introduced the IPSASB’s project to replace IPSAS 1 and considered, at a high level, how financial statements can better communicate information to users. Building on that discussion, this post turns to the general presentation requirements that shape how information is organised, classified and explained in the financial statements.
Definitions of elements
A key proposal is to align the definitions of assets, liabilities, revenue and expenses with the IPSASB’s Conceptual Framework. This matters because definitions affect when items are recognised and how they are presented, which in turn affects how users understand an entity’s financial position and financial performance. However, this introduces an important tension. IPSAS Standards are authoritative, while the Conceptual Framework is not. Aligning definitions may therefore create uncertainty where existing Standards were developed using different concepts.
For example, the revised definition of a liability no longer requires settlement to result in an outflow of resources. This broader definition may affect how certain obligations are assessed before the recognition and measurement requirements in individual Standards are applied and highlights the need to carefully consider how the revised definitions would interact with existing IPSAS Standards.
Comparative information
The next proposal also deals with how users interpret changes in reported information over time. The IPSASB is proposing to require a third statement of financial position when prior-period information is materially restated. This statement would be presented at the beginning of the preceding period, consistent with IFRS 18 Presentation and Disclosure in Financial Statements. The proposal is intended to help users understand the effect of material restatements on opening balances, although it may introduce additional reporting complexity for preparers.
Material information
A further proposal focuses on materiality, which is central to deciding what information should be presented or disclosed. Amendments are proposed to the current IPSAS 1 definition of ‘material’ to align with the IPSASB’s Conceptual Framework. These amendments would also incorporate IASB guidance to support more consistent materiality judgements. The aim is to help preparers focus disclosures on information that could influence users’ decisions, rather than include immaterial information that may obscure key messages.
Together, these proposals deal with the foundations of presentation: what the elements mean, how comparative information is shown, and how material information is identified. The next post in this series moves from those general requirements to the Statement of Financial Position and considers whether its current structure should remain largely unchanged or whether greater prescription is needed.
Share your comment
The ASB is consulting locally through ED 221 to gather input that will inform South Africa’s response to the IPSASB’s proposals. The matters discussed above relate to Preliminary Views 2 to 4 in the Consultation Paper. To get invited to roundtable discussions or share your written input, send an email to info@asb.co.za or siyasangan@asb.co.za before the comment deadline of 31 August 2026.
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.