The Secretariat submitted comment to the International Public Sector Accounting Standard Board (IPSASB) on the proposed IPSAS on Tangible Natural Resources (ED 92). ED 92 was issued currently by the ASB as ED 212.

Local stakeholders supported the alternative view on the scope of the IPSAS – to not be a residual standard. A residual standard means that the IPSAS will be applied to an item that meets the definition of a tangible natural resource and is not within the scope of other existing IPSAS.

Stakeholders also supported the alternative view on the risk of inappropriate financial reporting for tangible natural resources in the scope of the ED. The residual standard approach means ED 92 does not consider the unique use, characteristics and accounting considerations of tangible natural resources in the scope of the ED.  

Stakeholders recommended that tangible natural resources held for conservation should be a subset of property, plant and equipment rather than including guidance for this group of assets in a separate IPSAS. The reasons for this recommendation are, among others, that:

• respondents found it difficult to distinguish when a resource falls within the scope of ED 92, or IPSAS 45 on Property, Plant and Equipment; and
• a similar approach used to develop accounting guidance for heritage and infrastructure assets should be adopted for tangible natural resources held for conservation.

Other areas where local respondents did not support the proposed guidance in ED 92 are, among others:

• subsequent measurement principles should not include requirements and guidance for assets held for financial capacity measured at fair value. The guidance should be limited to current operational value as tangible natural resources held for conservation are held for their operational capacity; and
• all the relevant guidance should be included in the IPSAS rather than cross-references to guidance in IPSAS 45. This will ensure that the IPSAS considers the use, unique characteristics and accounting considerations of the items that are in the scope of the IPSAS.

If you are interested in the comment letter submitted, it can be accessed here.

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.