IPSASB issues consultation paper on accounting for social benefits
30 Jul, 2015
The International Public Sector Accounting Standards Board (IPSASB) has issued a consultation paper that requests feedback on recognition and measurement requirements for social benefits, which the paper broadly defines as “benefits provided to individuals and households, in cash or in kind, to mitigate the effect of social risks.”
The paper proposes three approaches to accounting for social benefits:
- Obligating event approach — Social benefits are considered in the context of the definition of a liability in the IPSASB’s conceptual framework for public-sector entities.
- Social contract approach — The benefits are viewed from the standpoint of a social contract between a state and its citizens (e.g., because citizens have agreed to pay taxes).
- Insurance approach — This approach is based on the assumption that “some social benefits are similar in practice to insurance contracts.”
Comments on the consultation paper are due by 31 January 2016.
For more information, see the press release and consultation paper on IFAC’s Web site. On 21 September 2015, the IPSASB offers a webinar to discuss key issues in the consultation paper.