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IPSASB consults on accounting for revenue and non-exchange expenses

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Aug 22, 2017

On August 22, 2017, the International Public Sector Accounting Standards Board (IPSASB) published a consultation paper on potential recognition and measurement approaches for revenue and non-exchange expenses. The paper proposes updating existing IPSAS 23 "Revenue from Non-Exchange Transactions (Taxes and Transfers)" as well as to replace current IPSAS dealing with revenue arising from exchange transactions and construction contracts with an IPSAS based on IFRS 15.

The IPSASB's motivation for the proposed updates is to address some key IPSAS implementation issues, to maintain IFRS convergence, and to address gaps in literature that have been identified in accounting for non-exchange expenses.

For non-exchange transactions with performance obligations the paper discusses two potential revenue recognition approaches, one that maintains the principles within IPSAS 23 and one that builds on recognising revenue when identified performance obligations have been met.

The paper also offers two possible approaches for the recognition of non-exchange expenses. The first one relies on the IPSASB’s Conceptual Framework to determine when a resource provider has a liability and an expense while the second one mirrors the equivalent revenue approach.

The implementation issues addressed relate to the recognition of revenue from capital grants and services in-kind; initial and subsequent measurement of non-contractual receivables; and subsequent measurement of non-contractual payables.

Comments are requested by January 15, 2018.

Review the press release and access the consultation paper and an At a Glance overview of the consultation paper on the IPSASB's website.

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