report on standard-setting activities - ian carruthers, john stanford, , ipsasb
Post on 13-Apr-2017
20 Views
Preview:
TRANSCRIPT
Page 1 | Proprietary and Copyrighted Information
IPSASB Update
Ian Carruthers
IPSASB Chair
John Stanford
Technical Director
OECD 17th Annual Accruals Symposium
Paris
2 March 2017
Page 2 | Proprietary and Copyrighted Information
IPSASB progress during 2016
Final pronouncements approved:
• Applicability of IPSASs
• Minor Improvements
• Impairment of Revalued Assets
• Update of IPSAS 25 Employee Benefits – IPSAS 39
• Public Sector Combinations - IPSAS 40
Consultation paper issued for comment:
• Public Sector Financial Instruments – monetary authority issues
Staff Paper issued:
• Emissions Trading Schemes
Consultations closed - responses being analysed:
• Update of Cash Basis IPSAS ED 61 (July 31st)
• Social Benefits Consultation Paper (January 31st) – ED being developed
Page 3 | Proprietary and Copyrighted Information
• Amalgamation or
Acquisition
• Control essential for
acquisition, but not
conclusive
• Economic substance
– Consideration
– Decision Making
• Carrying amounts for
amalgamations vs fair
value for acquisitions
IPSAS 40 Public Sector Combinations:
Classification
No Yes
No Yes
Does one party to the public sector
combination gain control of operations?
Is the economic substance of the public sector
combination that of an amalgamation?
Amalgamation Acquisition
Page 4 | Proprietary and Copyrighted Information
Current IPSASB work programme:
Key projects 2016 - 2018
Project Public sector
specific
IFRS
convergence
Social Benefits
Revenue & Non-Exchange Expenditure
Heritage
Leases
Financial Instruments
Public Sector Measurement (starting March 2017)
Infrastructure Assets (starting June 2017)
Cash Basis IPSAS (limited-scope update)
Page 5 | Proprietary and Copyrighted Information
Revenue and Non-Exchange Expenditure
• Current global literature on Revenue
– IPSAS 23 (Non-Exchange Revenue: Taxes and Transfers)
– IPSAS 9 (Revenue from Exchange Transactions)
– IPSAS 11 (Construction Contracts)
– IFRS 15 (Revenue from Contracts with Customers)
• Single CP to address need for common approach between
Non-Exchange Revenue and Expenditure (e.g. grants)
• Replace IPSASs 9 & 11 with IFRS 15-based standard
• Retain IPSAS 23-based standard - address application issues
• Assess extent to which public sector version of IFRS 15
performance obligation approach can help
Page 6 | Proprietary and Copyrighted Information
Category C
Converged IFRS 15
Sale of goods or services
on commercial terms
e.g. fees from
professional services
provided at market rates
Category B
Stretched Performance
Obligation Approach?
Satisfaction of
performance obligations
but does not include all
the characteristics of a
commercial based
transaction
e.g. fees in exchange for
the delivery of subsidised
health services
Category A
IPSAS 23 based
standard
No performance
obligations
e.g. taxes, transfers,
grants with no restrictions
over use
Transaction ‘categories’
Current classification
Potential re-classification
Description (in summary)
Example
Non-Performance
obligation
Performance Obligation
Exchange
Non-Exchange
Revenue reporting options
Page 7 | Proprietary and Copyrighted Information
Non-Exchange Expenditure
• Non-exchange expenses outside Social Benefits project e.g.
Defense, Education and Health expenditure, transfers / grants
• No current IPSAS
• Consistency / links with Social Benefits and existing IPSASs
• Three potential approaches:
– Obligating event approach (IPSAS 19 - based)
– IFRS15 – based performance obligation approach (reverse of revenue)
– IPSAS 23 reverse
• No obligating event for Collective Goods and Services, or
Other Transfers in Kind?
• Obligating event limited to transfers /grants to other entities?
Page 8 | Proprietary and Copyrighted Information
Leases
• Existing IPSAS 13 based on IAS 17
• IFRS convergence project – responding to new IFRS 16
• Changes lessee recognition model
• More on balance sheet – fiscal impact?
• Retention of IPSAS 17 not an option – mixed groups
• Public Sector needs symmetry between lessee and lessor
accounting – lessor / lessee arrangements common e.g.
property
• Board view that IFRS 16 lessor accounting inappropriate for
public sector due to lack of symmetry
• ‘Right of use’ model under consideration for lessor accounting
Page 9 | Proprietary and Copyrighted Information
Lessor Accounting—Context of Development of
Options
Lessor accounting – Alternative options
IPSAS 32
Service Concessions:
Grantor
IPSASB
“Rules of the Road”
IPSASB
Conceptual Framework
New
IPSASB
lessor
guidance?
Consistency
with
IPSASB
literature
Page 10 | Proprietary and Copyrighted Information
Public Sector Measurement (1):
CF measurement bases
Assets Liabilities
Historical Cost Historical Cost
Current Value measures
• Market Value
• Replacement Cost
• Net Selling Price
• Value in Use
Current Value measures
• Market Value
• Cost of Fulfilment
• Cost of Release
• Assumption Price
Page 11 | Proprietary and Copyrighted Information
Public Sector Measurement (2)
• Combined impact on IPSASs of CF and IFRS 13:
– Service potential - need for entry-based values
– Existing measurement requirements not consistent with CF
– Fair value references inconsistent with IFRS 13 (exit-based)
• Other key issues:
– Transaction costs treatment (including borrowing costs)
– Consistency with GFS and IVSC guidance
– Further Implementation Guidance needed?
• Task Force to include GFS and IVSC representatives
• Preliminary analysis stage before deciding next steps
Page 12 | Proprietary and Copyrighted Information
Developing the next IPSASB Strategy and Work Plan
Multi-year Strategy (2019-2023), Work
Plan to implement/operationalize Strategy
PIC
advice
CAG input
Public consultation 2018
Stakeholder outreach 2017
Page 13 | Proprietary and Copyrighted Information
• Complexity of PFM landscape
• Coordination with other stakeholders?
• Relative balance between:
– Addressing public sector-specific issues?
– Maintaining (increasing?) IFRS convergence?
– Relationship with Government Finance Statistics?
– Improving communication of financial information?
• IPSASB’s role in relation to adoption and implementation?
• How do these demands fit with available resources?
• Development work during 2017
• Public consultation H1 2018 – Finalise H2 2018.
2019-2023 Strategy / Work Plan challenges
Page 14 | Proprietary and Copyrighted Information
Social Benefits: Project Timeline
• 2013
Project Reactivated
• 2015
CP Issued
• 2017
ED Expected
• 2018
IPSAS Expected
Page 15 | Proprietary and Copyrighted Information
Social Benefits: Latest Coverage
Projects
Social Benefits
Social Assistance (Excluding Universal Services)
Social Security
(Excluding Universal Services)
Non-Exchange Expenses
Universal Services and
Other Transfers In
Kind
Collective Goods and Services
IPSAS 39
Employment Related Social
Insurance
Page 16 | Proprietary and Copyrighted Information
Option 1
• Obligating Event Approach
Option 2
• Social Contract Approach
Option 3
• Insurance Approach
CP: Recognition and Measurement Options
Page 17 | Proprietary and Copyrighted Information
Option 1
• Obligating Event Approach
Option 2
• Social Contract Approach
Option 3
• Insurance Approach
CP: Recognition and Measurement Options
Page 18 | Proprietary and Copyrighted Information
Social Benefits: Insurance Approach
Apply forthcoming IFRS on insurance contracts
• Intended to be fully funded from contributions
• Managed in the same way as an insurer manages insurance contracts
• Limited ability to change scheme
• Separate fund or earmarked asset
• Participants have enforceable rights
• Separate entity strengthens case
Use insurance approach when:
Page 19 | Proprietary and Copyrighted Information
Social Benefits: Obligating Event Approach
Eligibility Criteria Met
to Receive Next
Benefit
Claim Approved
Payment Date Arrived
Eligibility Criteria
Met to Receive
Next Benefit
Claim Approved
Eligibility Criteria
Met to Receive
Next Benefit
Eligibility Criteria
Initially Met
Key Participatory
Events Occur
Some but not all
eligibility criteria
may be met
Key Participatory
Events
Eligibility
Criteria Met to
Receive Benefit
Threshold
Eligibility
Criteria
Approved
Claim
Enforceable
Claim
Earliest
Recognition
Point
Latest
Recognition
Point
Eligibility criteria met to
receive next benefit
Under
dis
cussio
n
Page 20 | Proprietary and Copyrighted Information
Heritage: Project Timeline
• 2015
Project Activated
• 2017
CP Projected
• 2018
ED Possible?
• 2020
IPSAS/Amendment/Other Output Possible ?
Page 21 | Proprietary and Copyrighted Information
Description of Heritage Items
• Items that are intended to be held indefinitely and
preserved for the benefit of present and future generations
because of their rarity and/or significance in relation, but
not limited, to their archeological, architectural,
agricultural, artistic, cultural, environmental, historical,
natural, scientific or technological features.
Page 22 | Proprietary and Copyrighted Information
Heritage Assets—Draft Consultation Paper
proposes:
• Heritage items can be assets
• Recognize heritage items if they meet recognition criteria:
– Asset definition
– Able to be measured
• Measurement bases:
– Historical cost
– Replacement cost
– Market value
• Acknowledge non-recognition and recognition at
symbolic/nominal value but question conceptual validity
Page 23 | Proprietary and Copyrighted Information
Heritage Liabilities—Draft Consultation Paper:
• Do heritage preservation intentions give rise to present
obligations and liabilities?
– Special characteristics of heritage items do not, of themselves,
result in a present obligation
– Entity is able to avoid an outflow of resources
– Do not recognize a liability based only on intentions
Page 24 | Proprietary and Copyrighted Information
Questions, discussion & further information
• Visit our webpage http://www.ipsasb.org/
• Or contact us by e-mail : IPSASB Chair: iancarruthers@ipsasb.org Technical Director: johnstanford@ipsasb.org
top related