IPSASB publishes final guidance on accounting for social benefits and exposure draft on collective and individual services and emergency relief

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01 Feb, 2019

The International Public Sector Accounting Standards Board (IPSASB) has released International Public Sector Accounting Standard (IPSAS) 42 'Social Benefits' and an related Exposure Draft (ED) 67 'Collective and Individual Services and Emergency Relief (Amendments to IPSAS 19)' to address a wide range of significant government expenditures.

IPSAS 42 Social Benefits provides guidance on accounting for social benefits expenditure. It defines social benefits as cash transfers paid to specific individuals and/or households to mitigate the effect of social risk. The standard requires an entity to recognise an expense and a liability for the next social benefit payment. IPSAS 42 establishes principles and requirements for:

  • Recognising expenses and liabilities for social benefits;
  • Measuring expenses and liabilities for social benefits;
  • Presenting information about social benefits in the financial statements; and
  • Determining what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the social benefits provided by the reporting entity.

In order to extend IPSASB’s guidance to public services as well as cash transfers, ED 67 Collective and Individual Services and Emergency Relief proposes new requirements for accounting for collective services (such as defense at national-levels), individual services (such as healthcare) and emergency relief. For collective and individual services, ED 67 proposes that an expense is recognised at the point of service delivery. ED 67 also proposes that an expense and liability is recognised for some emergency relief, but not where emergency relief is delivered as an ongoing activity of government. The IPSASB notes that the distinction between social benefits and collective and individual services is important, but the accounting treatment of these transactions should be conceptually consistent. Comments on the ED are requested by 31 May 2019.

The following additional information is available on the IPSASB website:

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