Aggestam a project management perspective on the adoption of accrual based ipsas
World Accounting Summit 2009
1. The Dawn Of A Transparent Accounting Era Transforming to International Public Sector Accounting Standards (IPSAS) – Opportunities and Challenges www.accountingsummit.com
25. Issues in The Netherlands27 different sets of financial statements, for ministries, counties, and various international organizationsblackstone-interim.com
31. BackgroundWho apply IPSASs ? UHLCM has approved on 30 November 2006 a recommendation of its Task Force on Accounting Standards to adopt IPSAS (International Public Sector Accounting Standards) as the accounting standards of the UN system, by 1 January 2010. This recommendation will lead to one of the most radical changes in the financial management of the organizations of the system in the past many years. www.pahladsingh.in
35. Transforming from modified cash accounting to IPSASLessons learned www.pahladsingh.in IPSAS texts are difficult Training is a challenge: internal and external – changing attitude/mindset Due process Pilots Rewrite accounting manuals
36. Transforming from modified cash accounting to IPSASLessons learned www.pahladsingh.in Accrual accounting should be part of a widerreform It is about people, institutions and commitment Keep a balance between theory and the reality of the institution Make the financial actors responsible The development of a soundinternalcontrolsystem is a key element for the modernisation of public management Modernising accounting in the public sector requires financiallyliterategeneralmanagement
37. Defining and understanding the new IPSASs Conceptual Framework To establish the concepts, definitionsand principles that are to be applied in developing IPSASs Scope: the role and authority of the IPSASB Framework; the objectives of financial reporting; the scope of financial reporting; the qualitative characteristics of information included in general purpose financial reports (GPFRs); and the nature of the reporting entity. A public sector reporting entity may be an entity with a separate legal identity or other organizational structure or arrangement. www.pahladsingh.in
38. Defining and understanding the new IPSASs Accounting and Financial Reporting for Service Concession Arrangements The grantor must report the property as an asset in its financial statements if it is considered to control the property If scheduled payments made by the grantor can be separated into a construction element and a service element: present value of the scheduled construction payments should be used if lower than the fair value of the property. Other cases: liability is initially measured based on the fair value of the property Contractually determined inflows of resources to be received by a grantor from an operator should be recognized as revenue by the grantor. Amounts received in advance of providing a commensurate level of access to the property should be reported as a liability. blackstone-interim.com
39. Defining and understanding the new IPSASs Social Benefits: Disclosure of Transfers to Individuals or Households Entities are required to: determine the present value of amounts expected to be transferred estimate the variables that will determine the ultimate cost of providing those benefits (both demographic and financial assumptions). disclose of the reporting entity’s accounting policy for recognizing expenses and liabilities on a program basis. Ancillary disclosures: details of the principal legislation and regulations governing the programs blackstone-interim.com
40. Defining and understanding the new IPSASs Social Benefits: Disclosure of Transfers to Individuals or Households www.pahladsingh.in Total Present Value of eligible individuals or households Number of eligible individuals at year end Demographic assumption
41. Defining and understanding the new IPSASs Effects of Changes in Foreign Exchange Rates www.pahladsingh.in Based on the amendments to IAS 21 A net investment in a foreign operation may be any controlled entity of the economic entity Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation are recognized initially in a separate component of net assets/equity in the financial statements that include the foreign operation and the reporting entity.
42. Defining and understanding the new IPSASs Borrowing Costs Based on the amendments to IAS 23 Borrowings costs must be expensed as in the Public Sector borrowings are in general not attributable Capitalization allowed if borrowings cost were incurred specifically to acquire, construct or produce a qualifying asset in order to converge with IAS www.pahladsingh.in
43. Change… in the Public Sector And those of us who manage the public's dollars will be held to account — to spend wisely, reform bad habits, and do our business in the light of day — because only then can we restore the vital trust between a people and their government. www.pahladsingh.in