The document provides an overview of IPSAS 24 which deals with the presentation of budget information in financial statements. Some key points: - IPSAS 24 provides guidance for public entities to include budget information and comparisons of actuals to budget in their financial statements. - The objective is to demonstrate compliance with approved budgets and enhance transparency. - Entities that make their approved budgets public must present comparisons of original or final budget to actual amounts in primary financial statements, with explanations for material differences. - This ensures accountability by showing whether resources were obtained and used as planned in the approved budget.

1. Presentation of Budget Information in
Financial Statements (IPSAS 24)
Prof. Kabir Tahir Hamid
FCIFC, FIDRP, ACTM, CPA, CNA, ACS
Dean, Faculty of Management Sciences,
Bayero University, Kano
GSM: 08028376563, 08168743809
Email: khtahir.acc@buk.edu.ng
Being a Paper Presented at a 3-Day Capacity Building Workshop for
Staff of Bauchi State Internal Revenue Service on Computerized
Application of IPSASs on Budget and Revenue Generation held
from 3rd to 4th March, 2020 at DEC, Bauchi 1

2. 2
Outline of the Presentation
1. Introduction
2. The Concept of Budget
3. Objectives of Budget
4. Budget Circle
5. Budgeting skills
6. An overview of IPSAS 24 and its
Provisions
7. Conclusion

3. Introduction
 Budget is an important instrument of resource mobilization,
allocation and management in both private and public
organizations.
 Budgets are future oriented financial plans for allocating
resources among alternative uses.
 private organizations are not obliged to draw up a budget and
when they do they rarely publish their budgets.
 In governments, it is not only mandatory to draw the budgets
but it is also mandatory to publish them.
 Given the increasing importance of international
harmonization of financial reporting, it is reasonably expected
that the role of the IPSAS 24 will gain significance in
budgeting and financial reporting in the public sector.
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4. The Concept of Budget
Budget is an operational plan, expressed
in financial terms and based on the
expected income and expenditure for a
definite period usually a year.
A plan quantified in monetary terms
prepared and approved prior to a defined
period of time usually showing planned
income to be generated and/or
expenditure to be incurred during that
period. 4

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6. Objectives of Budget
Planning
Coordination
Performance Evaluation
Controlling
Communication
Motivation
Team Work
Efficiency
Quality Control
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7. The Budget Circle
The budget circle is the process involved
in the preparation of budget.
The Budget process involves a number of
ongoing activities in a circle
throughout the year.
It starts with macro-economic policies and
objectives, setting revenues and
expenditure ceilings, approval and its
execution.
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8. The Budget Circle… Cont’d
 The following are important steps in the preparation of the
Budget:
 Issuance of Call Circular;
 Communication of the contents of the call circular to all
stakeholders;
 Budget defense at all Levels;
 Collation of Financial Estimates by the Budget Office
(Federal/State/LGC);
 Submission of the Financial Estimates to the Chief Executive
(President/Governor/LG Chairman);
 Presentation of Appropriation Bill to the Legislature;
 Passage of the Appropriation Bill;
 Assent of the Appropriation Bill by the
President/Governor/LG Chairman into Budget.
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9. Budgeting Skills
 Objective evaluation skills
 Recording Skills
 Prioritization skills
 Negotiation skills
 Preparation skills
 Contingency Planning skill
 Behavioural skills (objectivity, participative, right attitude,
etc)
 Feasibility analysis skills
 Implementation skills
 Inclusiveness and Motivational Skills
 Monitoring and tracking skills
 Review and variance analysis skills 9

10. An Overview of IPSAS 24
 IPSAS 24 deals with Presentation of Budget
Information in Financial Statements.
 Effective date is annual financial statements covering
periods beginning on or after January 1, 2009.
 Earlier application is encouraged. If an entity applies
this Standard for a period beginning before January
1, 2009 it shall disclose that fact.
 When an entity adopts the accrual basis of
accounting, as defined by IPSASs, subsequent to this
effective date, this Standard applies to the entity’s
annual financial statements covering periods
beginning on or after the date of adoption.
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11. An Overview of IPSAS 24… Cont’d
 IPSAS 24, in furtherance of IPSAS 1, provides
guidance for public entities which publicize their
approved budgets to include budget information and a
comparison of budget and actual amounts in their
financial statements and explanation of any material
differences.
 Its objective is to ensure that public sector entities
discharge their accountability obligations and enhance
the transparency of their financial statements by
demonstrating compliance with the approved budget
for which they are held publicly accountable.
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12. Approved Budget
 The approved budget is the expenditure authority
derived from laws, appropriation bills, rules,
decisions etc, for an entity to apply specified
funds from its revenue or from the treasury for
agreed and identified purposes.
 The approved budget establishes authority for
expenditure on the specified items and the legal
limits within which an entity must operate.
 In some entities, the approved budget for which
the entity will be held accountable may be the
original budget and in others it may be the final
budget.
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13. Original and Final budget
 The original budget is the budget that was first
approved for application in the budget year.
 Budgetary adjustments may be necessary in the
course of the year where the original budget did not
adequately envisage actual operating circumstances.
Actual revenue may fall short of budgeted amount
and reductions or transfers on budget heads or line
items become necessary to accommodate changed
priorities and also to maintain fiscal discipline.
 The final budget is the original budget for the
period adjusted for reserves, provisions accruals,
transfers, allocations, and other authorized changes.
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14. Budgetary Process
Most, but not all, governments prepare
and issue their annual financial
budgets as public documents, or
otherwise make them publicly
available.
The budgetary process may be
conducted on a cash or accrual basis at
each of the levels of government
(local, state, and national).
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15. Budget Formulation
 During the formulation stage, initial budgets
are developed and submitted to the legislature
for consideration and spending authorization
based on the political priorities and fiscal
policies of government.
 These budgets reflect the financial
characteristics of the government’s plans for
the forthcoming period and are used to analyze
the potential consequences of those plans on
the economy.
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16. Fiscal Transparency
Fiscal transparency is a major
contributor to the cause of good
governance and makes governments
more accountable for the
implementation of fiscal policy,
Fiscal transparency requires disclosure
of more than just budget (and actual)
figures. It also requires disclosure of
information on the assumptions behind
budget figures.
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17. Code of Good Practices on Fiscal Transparency
 To encourage countries to publicize their budgetary
practices, the International Monetary Fund (IMF)
issued a Code of Good Practices on Fiscal
Transparency. The Code recommends the
following four key objectives:
Clarity of roles and responsibilities of government;
The public should provide information on the past,
current, and projected fiscal activity of government
in a timely manner;
Budget preparation, execution, and reporting in an
open manner; and
Data quality and independent assurances of
integrity.
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18. Financial Management
 Many governments provide guidance documents on the
budget process and procedures. These include the areas to be
considered when developing proposals and new initiatives,
capital budgeting and working capital management, setting
user charges, and output costing.
 Some professional organizations publish best practices in
public budgeting in order to encourage their members to
improve their budgeting procedures. The following four
principles are recommended
1. Establish broad goals to guide government decision making;
2. Develop approaches to achieve the goals;
3. Develop a budget consistent with approaches to achieve
goals; and
4. Evaluate performance and make adjustments.
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19. Budget Information Reporting
General purpose financial reporting by
public sector entities may provide
information on whether resources were
obtained and used in accordance with the
legally adopted budget.
 Where the financial statements and the
budget are on the same basis of
accounting, IPSAS 24 encourages the
inclusion in the financial statements of a
comparison of actual amounts with the
budgeted amounts for the reporting
period.
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20. Budget Information Reporting Formats
 The use of a columnar format for the financial
statements, with separate columns for
budgeted amounts, actual amounts and for any
variances from the budget or appropriation
 A statement by the individual responsible for
the preparation of the financial statements that
the budgeted amounts have not been
exceeded.
 If any budgeted amounts or appropriations
have been exceeded, or expenses incurred
without appropriation or authority, then details
may be disclosed by way of note to the relevant
item in the financial statements.
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21. Presentation of a Comparison of Budget
and Actual Amounts
 Some public entities are required by law to make
public their approved budgets while others freely
opt to do so to enhance their public accountability
and transparency.
 IPSAS 1 & 24 require a public entity which makes
public its approved budget to present a comparison
of (original or final) budget amount and actual
amount in their primary financial statements, and;
 by way of note, an explanation of material
differences between the budget and actual amounts,
unless such explanation is included in other
documents issued with the financial statements and
a cross reference to those documents is made in the
notes.
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22. Reasons for Presentation of Budget amounts in
the Financial Statements
 For public entities to demonstrate compliance with
the approved budget(s) for which they are held
publicly accountable and
 To enhance the accountability and transparency of
the entity by enabling the users of the financial
statements to identify whether resources were
obtained and used in accordance with the approved
budget.
 Differences between the actual the budget amounts
(variances) may also be explained in the financial
statements for completeness.
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23. Form of Presentation and Disclosure of
Budget amounts in Financial Statements
 A comparison of budget and actual amounts shall be
presented in the financial statements either as:
(1) A separate information in the financial statement or
(2) Additional budget columns in the financial statements.
 The comparison of budget and actual amounts in the
financial statements shall present separately for each level
of the entity:
(a) The original and/or final budget amounts;
(b) The actual amounts on a comparable basis; and
(c) By way of disclosure note, explanation of material
variances between actual and budget amounts.
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24. Presentation and Disclosure on
Comparable Basis
 All comparisons of budget and actual amounts shall
be presented on a comparable basis, that is:- on the
same accrual, cash or other accounting basis, same
classification basis and for the same entities and
period as for the approved budget.’
 This way, information about compliance with the
budget is disclosed in the financial statements on the
same basis as the budget itself.
 Where separate budgets approved for individual
controlled entities or activities are recompiled to
facilitate comparison of consolidated budget
amounts with actual amounts in the consolidated
financial statements, such consolidation does not
amount to changes or revisions to the approved
budgets.
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25. Budget and Financial Statements
Prepared on Different Bases
Where the budget and financial statements are
prepared on different basis, disclose by note
that the budget and the accounting bases differ
and that the Statement of comparison of Budget
and Actual Amounts is prepared on the budget
basis.
Such disclosure and reconciliation statement is
not required where budgets are prepared on the
accrual basis and in the formats adopted for
financial statements and additional budget
columns can be included in the financial
statements for presentation of budget amounts.
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26. Incomparable Accounting and
Budgeting Bases
Governments are encouraged to operate their
budgeting and accounting systems on the same
basis.
If the budgetary system is on a different basis
than the accounting system, a statement should
be developed to reconcile key differences
between the two systems.
In those instances where the budgetary system
is transitioning to accrual budgeting, a separate
reconciliation procedure with the accrual
financial reports will be necessary.
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27. Reconciliation of Actual Amounts on Comparative
(Budget) Basis and Actual Amounts in the Financial
Statements
• Where the financial statements and the budget are not
prepared on a comparable basis, the actual amounts
presented on a comparable basis to the budget shall be:
(a) If the accrual basis is adopted for the budget,
reconciled to total revenues, total expenses and net
operating, investing and financing cash flows in the
financial statements, or
(b) If a basis other than the accrual basis is adopted for
the budget, the major totals presented in the statement of
budget and actual comparison will be reconciled to net
operating, investing and financing cash flows in the
financial statements.
• The reconciliation shall be disclosed as part of the
statement of comparison of budget and actual amounts or
in the notes to the financial statements.
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28. Institutions in the Budget Process
 The Preparation of the central Government Budget
in is done in co-operation between several levels of
Government. The different authorities play their
own special role - not only in the preparation of the
Budget Proposal, but also in implementing the
Budget, and controlling the outcome.
 The authorities and the functions they perform can
be found in every country. A closer study will
however show differences with regard to
Procedures used in the Budget preparation and
appropriation Process, and during Budget
implementation, follow-up and control.
 This include the executive, the parliament, the
ministry of finance, the budget office, the spending
MDAs, the Bureau for public procurement, etc,
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29. Budget Execution
 Procedures for the execution and monitoring of
approved expenditure and for collecting revenue
should be clearly specified.
 There should be a comprehensive, integrated
accounting system which provides a reliable basis for
assessing payment arrears.
 Procurement and employment regulations should be
standardized and accessible to all interested parties.
 Budget execution should be internally audited, and
audit procedures should be open to review.
 The national tax administration should be legally
protected from political direction and should report
regularly to the public on its activities.
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30. Disclosure on Changes from Original to Final
Budget
By way of note present an explanation of
whether changes between the original and
final budget are a consequence of
reallocations within the budget, or of other
factors such as changes in the overall budget
parameters, including changes in policy, or
In a report issued before, at the same time as,
or in conjunction with the financial
statements, and shall include a cross
reference to the report in the notes to the
financial statements.
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31. Disclosures of Budgetary Basis,
Period and Scope
 Disclose in notes to the financial statements, information
about the basis of preparation of the financial statements and
the significant accounting policies adopted. This assists
users to better understand the relationship between the
budget and accounting information disclosed in the financial
statements.
 Disclose in notes to the financial statements the period of the
approved budget. Entities may approve budgets for an
annual period or for multi-year periods. Disclosure of the
period covered by the budget, where it differs from the
reporting period adopted for the financial statements, assists
the users to better understand their relationship with the
budget and the financial statement.
 Identify in notes to the financial statements the entities
included in the approved budget.
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32. Disclosure of comparative budget
information of the previous periods
IPSAS 24 requires a comparison of
budget and actual amounts to be
included in the financial statements of
entities which make public their
approved budgets.
But, it does not require the disclosure of
comparative information in respect of
the previous periods.
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33. CONCLUSION
Government budget is indeed a key and strategic
tool that is used to provide services to the public.
The processes and activities involved in budget
management require attention of all stakeholders to
ensure efficiency, accountability and transparency.
The budget reforms are necessary for addressing
some of the concerns in budget management at
both the Federal, States and Local
Government levels.
More concerted efforts are needed to enhance
efficiency and effectiveness in the use of resources.
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34. CONCLUSION… Cont’d
Presentation of budget information in the
financial statements by government and its
agencies in Bauchi State has to comply with
the provision of IPSAS 24.
The objective of IPSAS 24 is to ensure that
public sector entities discharge their
accountability obligations and enhance the
transparency of their financial statements by
demonstrating compliance with the approved
budget for which they are held publicly
accountable.
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35. You have been a great
audience!
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