Local support for international guidance on public sector leases

After approving IPSAS 43 on Leases, the International Public Sector Accounting Standards Board (IPSASB) developed guidance to account for concessionary leases and right-of-use assets in-kind. These arrangements occur more frequently in the public sector than the private sector. The IPSASB developed public sector specific guidance as no guidance exists in the private sector to account for these types of arrangements.  

An Exposure Draft (ED) was issued in May 2024 to propose amendments to IPSAS 47 on Revenue for concessionary leases. Non-authoritative guidance on arrangements conveying rights over assets was also proposed for IPSAS 47 and IPSAS 48 on Transfer Expenses.  

Locally, the proposed amendments to IPSAS 47 were supported. Recommendations were made to include the applicable transitional provisions in the Standard itself, and to clarify that, in assessing if the control criterion involving a right-of-use asset in-kind is met, the terms and conditions of the arrangement should be considered.

The Secretariat of the ASB also supported the amendments to IPSAS 48. It was observed  that some of the examples do not appropriately illustrate and explain the application of the Standard in accounting for arrangements conveying rights over assets and in the context of services in-kind. As a result, it was recommended that these examples be expanded and/or clarified. A recommendation was also made for the IPSASB to reconsider the consistency of the guidance on services in-kind with collective and individual services in IPSAS 19 on Provisions, Contingent Liabilities and Contingent Assets.

The comment letter submitted to the IPSASB can be accessed here.