News from the IPSASB

The IPSASB met virtually during September 2021 to discuss the following projects:

• Accounting and Reporting by Retirement Benefit Plans
• Conceptual Framework – Limited Scope Update – Next Stage
• Leases
• Natural Resources
• Revenue and Transfer Expenses

Accounting and Reporting by Retirement Benefit Plans

This project aims to develop an IPSAS adapted from IAS 26 on Accounting and Reporting by Retirement Benefit Plans. The scope of the proposed IPSAS is the same as IAS 26. However, the IPSASB agreed to eliminate alternatives for measuring and presenting actuarial present value of promised retirement benefits and the valuation of plan assets. The IPSASB is expected to approve the proposed IPSAS as an Exposure Draft in December 2021.

Conceptual Framework – Limited Scope Update – Next Stage

This  project aims to update the Conceptual Framework for a limited number of issues identified when the International Accounting Standards Board^® issued its Conceptual Framework in 2018. The IPSASB agreed to amend the definitions of an asset and liability to be consistent with the IASB. The concept of service potential will be retained with minor wording changes. Guidance on materiality will be amended to reflect some of the IASB’s amendments while new guidance on prudence, executory contracts and the unit of account will be added. These proposals are expected to be approved for exposure at the December 2021 meeting.

Leases

The IPSASB considered the responses to Exposure Draft 75, Leases. As the proposals in the Exposure Draft were supported, the IPSASB agreed to finalise the new IPSAS based on those proposals. The new IPSAS, which is substantially aligned with IFRS 16 on Leases, is expected to be approved in
December 2021. The new IPSAS will not be issued until the IPSASB has completed the project’s second phase on public sector-specific lease arrangements.

Natural Resources

The IPSASB is developing a Consultation Paper on natural resources. The Consultation Paper discusses three categories of natural resources – subsoil resources, living resources and water their potential recognition, measurement and presentation in the financial statements. The IPSASB reviewed the draft Consultation Paper, which is planned for finalisation in the first quarter of 2022.

Revenue and Transfer Expenses

The IPSASB continued its discussion of issues raised by respondents in the Exposure Drafts on revenue and transfer expenses. The IPSASB considered guidance to clarify when a liability exists for a transfer recipient in a binding arrangement without performance obligations; and when there is an asset for a transfer provider in a binding arrangement. Another issue considered was whether the distinction between transfer expenses with and without performance obligations is necessary – and the IPSASB agreed with respondents views that it should be removed.

IPSASB will hold its next quarterly check-in meeting on 28 October 2021. This will be followed by the last full-meeting for 2021 to be held virtually in December. For more information or to register as an observer, please visit the IPSASB website.

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.