Financial statements may comply with the accounting requirements and still be presented in a manner that is difficult for users to interpret and use to make informed decisions and hold entities accountable. The question being considered internationally is whether financial statements are structured to allow users to understand how public resources are raised, spent and managed, and whether those resources support service delivery.
The IPSASB is currently addressing this issue through its project to replace IPSAS 1, Presentation of Financial Statements. The IPSASB has issued Preliminary Views and a Specific Matter for Comment to test its proposals with stakeholders. These proposals reflect areas where the IPSASB is considering changes and where it considers that the existing requirements may be appropriate.
A key starting point in this project is whether a new Standard should be developed using IFRS 18 Presentation and Disclosure in Financial Statements as a foundation, with appropriate adaptations to reflect the objectives of financial reporting in the public sector. While this may introduce greater structure and alignment with private sector reporting, it also raises questions about whether concepts developed for profit-oriented entities are appropriate for a public sector environment focused on service delivery and public accountability.
We will be publishing a series of articles to unpack more of these proposals and highlight key considerations where stakeholder input will be valuable.
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The ASB is consulting locally through ED 221 to gather input for South Africa’s response to the IPSASB’s proposals. The matters discussed above relate to Preliminary View 1 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.