Presentation made by Alexandre Makaronidis, Eurostat, at the 16th Annual OECD Accruals Symposium held at the OECD Conference Centre, Paris, on 21-22 March 2016.

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OECD accruals symposium spring 2016
Paris, 21/22 March 2016
Update on the EPSAS project
Alexandre Makaronidis
Head of Task Force EPSAS, European Commission - Eurostat

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Budgetary Frameworks Directive (2011/85/EU)
• MSs shall have in place public accounting systems
comprehensively and consistently covering all sub-sectors of
general government,
• containing the information needed to generate accrual data with a
view to preparing data based on the ESA standard
• subject to internal control and independent audits.
The Commission shall assess the suitability of the International Public
Sector Accounting Standards (IPSAS) for the Member States.
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Commission report on suitability of IPSAS (2013)
Key conclusions:
•Strong need for harmonised, accruals based PSA systems
•IPSASs cannot be implemented as they currently are
• not in full and not directly
•There are technical, conceptual and in particular governance issues to be
resolved
•IPSAS would be a suitable reference framework for the development of
European Public Sector Accounting Standards (EPSAS)
•Harmonisation on the basis of strong EU governance
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Why accruals? – Why harmonised accruals?
From an EU perspective the wide range of public sector accounting
standards result in a lack of:
• Fiscal transparency (= need for accruals), and
• Comparability (= need for harmonised accruals)
due to non-comparable, incomplete and inconsistent primary
accounting data
This impacts on both General Purpose Financial Statements and
Government Finance Statistics
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Figure 1: achieving fiscal transparency and comparability in one go

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Figure 2: increasing fiscal transparency first, comparability later
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Our priorities - autumn 2015 to 2016
• EPSAS Working Group
• Further support of accruals implementation and IPSAS
• EPSAS Cells – First Time Implementation and Definitions,
Governance Principles, Accounting Principles, …
• Issues papers
• Preparing the concrete proposal on the EPSAS framework
• Widening the range of stakeholder activities
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EPSAS Working Group
First meeting took place on 15-16 September 2015 in Malta
The first EU network of public sector accounting standard-setters at
the core of EPSAS development and implementation
Representatives invited from all Member States covering all sub-
sectors of general government
Observers from IPSASB, WB, OECD, ECB, ECA, FEE etc.
Next meeting on 7-8 July 2016 in Paris
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Further support of accruals implementation
The support of voluntary accruals implementation includes:
•Financial support for preparatory work for the modernisation of public
sector accounting systems on accrual basis (7 grant agreements
signed)
•Finalisation and release of First Time Implementation (FTI) guidance
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Drafting the concrete proposal on the EPSAS
framework – I.
Discussion with experts already took place in the EPSAS Task
Force Governance and Task Force Standards meetings.
Based on the experience of the Cell on FTI, further technical level
discussion will be focused on similar small cells of experts.
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New Cells in the short term:
•Cell on First Time Implementation (FTI)
•Cell on Definitions (Terms in use) was merged with FTI Cell
•Cell on Principles underlying EPSAS governance started its work
in December 2015
•Cell on Principles related to EPSAS standards started 18 March
2016
•Cell on EPSAS due process (later in 2016) 11
Drafting the concrete proposal on the EPSAS
framework – II.

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The Cell on First Time Implementation (FTI) has the objective to
prepare a draft guidance note in order to assist public sector entities
starting to work on accruals reforms and moving to a full accruals basis
of accounting, and in particular with a focus on the first accruals-based
OBS.
The Cell already met 3 times in 2015 and next meeting is foreseen for
April 2016.
The first draft was already presented in September 2015 to the WG in
Malta and the final draft is expected for the next WG in July 2016.
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Drafting the concrete proposal on the EPSAS
framework – III.

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Work on Terms in use will elaborate on the definitions and basic
terms needed to support the FTI guidance (elements,
measurement, recognition); and also with a view to the preparation
of the future EPSAS framework, taking into account:
•The work being done in the Cell on FTI
•The discussion at TF and WG meetings
•Consistency with existing references in the EU legislation
•Consistency with existing international references
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Drafting the concrete proposal on the EPSAS
framework – IV.

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Cell on Principles underlying EPSAS governance is elaborating
on a final set of governance principles, taking into account:
•The results of the Public Consultation on future governance
principles and structures
•The planned governance structure of EPSAS
•Legal requirements and boundaries established by EU legislation
including consistency with existing EU references
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Drafting the concrete proposal on the EPSAS
framework – V.

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Drafting the concrete proposal on the EPSAS
framework – VI.
Cell on Principles related to EPSAS standards is elaborating on a
final set of EPSA principles (EPSAP or conceptual framework), taking
into account:
•The planned principles underlying EPSAS governance
•The results of the Public Consultation on future governance principles
and structures
•Legal requirements and boundaries established by EU legislation
including consistency with existing EU references in the EU legislation in
terms of financial accounting and reporting.
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Eurostat and its consultants will draft issues papers on certain
accounting topics.
Experts from MSs will be also invited to contribute issues papers
on specific subjects and to comment on drafts provided by
Eurostat.
Systematic consultation arrangements with other stakeholders
(auditors, academia, etc.) should also be established.
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Drafting the concrete proposal on the EPSAS
framework – VII.

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EPSAS Framework
EPSAS Working Group
Development of EPSAS framework
EPSAS Cell on First Time
Implementation
EPSAS Cell on Definitions
(combined with Cell on FTI)
EPSAS Cell on Governance
Principles
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EPSAS Cell on Principles
related to Standards

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The objective is to involve stakeholders such as:
•sub-national authorities,
•auditors, or
•academia,
systematically in the EPSAS work.
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Widening the range of stakeholders

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European Commission (Eurostat) Task Force EPSAS:
http://ec.europa.eu/eurostat/web/government-finance-
statistics/government-accounting
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