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IPSASB publishes exposure draft on accounting for social benefits

  • IPSASB (International Public Sector Accounting Standards Board) (mid gray) Image

01 Nov 2017

The International Public Sector Accounting Standards Board (IPSASB) has published an exposure draft (ED) to address public sector reporting on social benefits. The proposals aim to improve consistency, transparency, and reporting by public sector entities of social benefit schemes, which account for a large portion of government expenditure in most jurisdictions. Existing IPSAS do not provide requirements or guidance on how to account for social benefits, leaving users without the information needed to assess government performance.

The ED contains two approaches for accounting for social benefits, the obligating event approach and an optional insurance approach that is based on the assumption that some social benefits are similar in practice to insurance contracts.

Entities are permitted, but not required, to use the insurance approach where a social benefit scheme meets certain criteria. The ED does not include requirements for the insurance approach, but directs entities to apply relevant international or national accounting standards by analogy. The ED clarifies this to mean IFRS 17 Insurance Contracts or national standards that have adopted substantially the same principles as IFRS 17.

Please click to access the press release on the IPSASB website. The IPSASB's consultation page offers access to the ED and additional background material.

Comments are requested by 31 March 2018.

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