Federal Department of Finance FDF

Improving the Accounting
Model of the Swiss
Confederation

Marc Wermuth
Federal Finance...
Key issues
 Consolidated financial statement:
 Extending the Scope or Stop
 Cash Flow Statement:
 Implementing IPSAS 3...
Consolidated financial statement
 The currently applied narrow scope doesn‘t generate
much different results than the fed...
Cash Flow Statement
 Current Cash Flow Statement:
 Cash flows include cash, receivables and payables.
 No separate pres...
Financial Instruments IPSAS 28-30
 Swiss Confederation Bonds:
 Measured at amortized cost instead of at cost
 Yield ins...
Military assets
 ESVG2010:
 Implemented from September, 2014.
 Requires purchases of weapons systems to be
treated as c...
Employee benefits
 Currently disclosed as a contingent liability.
 IPSAS 25 requires recognition as a liability.
 Appre...
Contact information
Federal Finance Administration FFA
Finance and Accounting
Bundesgasse 3
CH-3003 Berne
marc.wermuth@efv...
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OECD Public Sector Accruals Symposium - Marc Wermuth

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This presentation by Marc Wermuth was made at the 14th Annual OECD Public Sector Accruals Symposium, Paris 3-4 March 2014. Find out more at http://www.oecd.org/gov/budgeting/14thannualoecdpublicsectoraccrualssymposiumparis3-4march2014.htm

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OECD Public Sector Accruals Symposium - Marc Wermuth

  1. 1. Federal Department of Finance FDF Improving the Accounting Model of the Swiss Confederation Marc Wermuth Federal Finance Administration FFA 14th Annual OECD Public Sector Accruals Symposium, Paris, 3-4 March 2014
  2. 2. Key issues  Consolidated financial statement:  Extending the Scope or Stop  Cash Flow Statement:  Implementing IPSAS 3  Financial Instruments:  Implementing IPSAS 28-30  Military assets:  Recognition in the statement of financial position  Employee benefits:  Recognition as a liability in accordance with IPSAS 25 Federal Department of Finance FDF 14th Annual OECD Public Sector Accruals Symposium, Paris 3-4 March 2014 2
  3. 3. Consolidated financial statement  The currently applied narrow scope doesn‘t generate much different results than the federal financial statement.  How to move forward? Two possible options addressed to the Parliament:  Full Consolidation  Including market-based public services, e.g. Swiss Railway, Swiss Post, Swisscom  Including the social security fund  Added benefit compared to the current statement  Compliant with IPSAS  No Consolidation Federal Department of Finance FDF 14th Annual OECD Public Sector Accruals Symposium, Paris 3-4 March 2014 3
  4. 4. Cash Flow Statement  Current Cash Flow Statement:  Cash flows include cash, receivables and payables.  No separate presentation of operating, investing and financing activities.  Implementing Cash Flow Statement according to IPSAS 3:  Enhances comparability to Cantons, Municipalities and other countries.  Direct calculation of the change in gross debt. Federal Department of Finance FDF 14th Annual OECD Public Sector Accruals Symposium, Paris 3-4 March 2014 4
  5. 5. Financial Instruments IPSAS 28-30  Swiss Confederation Bonds:  Measured at amortized cost instead of at cost  Yield instead of coupon is the annual interest expenditure.  No premium is credited to interest expenditure in the year of issue.  Smoothing interest expenditure which eases the budgeting process.  Loans:  Measured at amortized cost instead of at cost.  Contractual financial guarantees:  Recognition as a financial liability if fair value is measurable. Otherwise application of IPSAS 19. Federal Department of Finance FDF 14th Annual OECD Public Sector Accruals Symposium, Paris 3-4 March 2014 5
  6. 6. Military assets  ESVG2010:  Implemented from September, 2014.  Requires purchases of weapons systems to be treated as capital expenditure in accordance with IPSAS.  Recognition as military assets:  Showing the annual costs of military assets.  Treatment in line with other administrative assets such as real estate, higways (service potential). Federal Department of Finance FDF 14th Annual OECD Public Sector Accruals Symposium, Paris 3-4 March 2014 6
  7. 7. Employee benefits  Currently disclosed as a contingent liability.  IPSAS 25 requires recognition as a liability.  Apprehensions by the Parliament in 2006 that a recognition of employee benefits could create claims by decentralised or outsourced entities did not prove right.  Fully adopting IPSAS 25 will ensure a transparent and complete recognition of expected future payments to settle the obligation resulting from employee service in the current and prior periods. Federal Department of Finance FDF 14th Annual OECD Public Sector Accruals Symposium, Paris 3-4 March 2014 7
  8. 8. Contact information Federal Finance Administration FFA Finance and Accounting Bundesgasse 3 CH-3003 Berne marc.wermuth@efv.admin.ch Accounting@efv.admin.ch Federal Department of Finance FDF 14th Annual OECD Public Sector Accruals Symposium, Paris 3-4 March 2014 8
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