Public Sector Accounting Forum (PSAF) May 2026: Highlights

The latest PSAF meeting was held on 5 May 2026. The meeting discussed developments and shared key information on public sector accounting and reporting, including the following:

Exposure Drafts open for comment (https://www.asb.co.za/comment-on-proposals/)

·        ED 218 on Improvements to IPSAS Accounting Standards – Volume 10. The comment deadline is 17 June 2026.

·        ED 219 on Definition of an Operation and Recognition of Acquired Liabilities and Contingent Liabilities (Amendments to IPSAS 40). The comment deadline is 17 June 2026.

·        ED 220 Making Materiality Judgments. The comment deadline is 14 August 2026.

·        ED 221 Consultation Paper on Presentation of Financial Statements. The comment deadline is 31 August 2026.

Technical guidance recently issued for comment OAG: Specimen financial statements

Published specimen financial statements for departments for 2026/27. The comment period closed on 29 May 2026.

Technical discussion

Technical question

Accounting treatment of changes in a variable interest rate implicit in a finance lease, specifically a decrease in interest and its impact on the lease liability and the leased asset in future periods.

Forum conclusion

A decrease in interest rates should still be treated and disclosed as contingent rentals, with an appropriate description and explanation provided in the notes. Materiality should also be taken into consideration.

If you would like to join the PSAF and keep abreast with public sector accounting developments or comments on any of the Exposure Drafts, contact us at info@asb.co.za.