The article published on 18 August 2026 considered the level of detail that should be included in the Statement of Financial Performance. This article considers the remaining areas in the IPSASB’s Presentation project: the Statement of Changes in Net Assets/Equity and disclosures in the notes.
These proposals are connected by a common question: how should information be presented so that users can understand the financial statements without being overwhelmed by unnecessary detail?
Statement of Changes in Net Assets/Equity
Items recognised outside suprplus/deficit and reclassification
International Public Sector Accounting Standards (IPSAS) currently require certain revenue and expense items to be recognised directly in net assets/equity rather than in surplus or deficit. Under an IFRS 18 Presentation and Disclosure in Financial Statements aligned approach, these items could be presented either:
- in the Statement of Financial Performance, below surplus or deficit; or
- in a second financial performance statement.
The IPSASB would also need a clear term for these items and therefore considered using “other financial performance”. However, neither the IFRS 18-aligned presentation approaches nor the term “other financial performance” is being proposed. Instead, the IPSASB proposes to maintain the existing approach because it is familiar to users and remains appropriate for the public sector.
Reconciliation displayed in the notes
The current IPSAS 1 requirement permits the reconciliation of each component of net assets/equity to be displayed either on the face of the Statement of Changes in Net Assets/Equity or in the notes. The IPSASB proposes to require the reconciliation to be displayed on the face of the statement. This would ensure that users can see how balances changed during the reporting period without having to look in the notes.
Guidance on distributions of Non-cash assets to owners
The IPSASB does not propose including guidance from IFRIC 17 Distribution of Non-cash Assets to Owners in IPSAS because these transactions are not prevalent in the international public sector.
Disclosure of information in the notes
The notes are important because they provide additional information that helps users understand the amounts presented in the financial statements.
The IPSASB proposes to retain the existing IPSAS 1 requirements for information disclosed in the notes, with amendments to clarify how entities organise the notes, apply materiality and judgement when determining what information to disclose. The new guidance would also require entities to aggregate and disaggregate items with dissimilar characteristics when necessary to avoid obscuring material information. These proposals recognise that useful disclosures are not only about providing more information, but about providing information that is well organised and relevant to users.
Management-defined performance measures
The IPSASB also considered whether the IFRS 18 requirements for management-defined performance measures should be incorporated into IPSAS. The IPSASB observed that alternative performance measures in the public sector differ from the private sector and may relate to fiscal monitoring, service delivery targets or other non-financial information.
The IPSASB is therefore proposing not to incorporate the IFRS 18 requirements for management-defined performance measures, and not to develop a public-sector version of those requirements. The issue for stakeholders to consider is whether existing public sector reporting frameworks provide sufficient transparency, or whether additional IPSAS guidance 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 11 to 16 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.