IPSASB requests comment on long-term sustainability of public sector finances proposals

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21 Oct 2011

The International Public Sector Accounting Standards Board (IPSASB) has published Exposure Draft (ED) 46 Recommended Practice Guideline, which is designed to provide good practice guidelines on reporting on the long-term fiscal sustainability of a public sector entity.

The IPSASB notes that the sovereign debt crisis has emphasised the significance of the fiscal condition of governments and other public sector entities to the global economy. There have been heightened concerns about the ability of governments to meet debt servicing obligations and the extent to which they can maintain current policies and meet current and future obligations related to entitlement programs, without raising taxes and contributions or increasing debt to unsustainable levels.

The exposure draft proposes the disclosure of projections of inflows and outflows of resources over the longer term, together with narrative explanations of the main risks facing governments and other public sector entities. This information is designed to permit users of general purpose financial reports of public sector entities to assess the extent to which current policies are sustainable, as complimentary information to the financial statements.

The Recommend Practice Guideline, if finalised, would not be an International Public Sector Accounting Standard (IPSAS) and therefore an entity would not required to comply with it in order to comply with IPSASs.

The ED is open for public comment until 29 February 2012. Click for IPSASB press release (link to IFAC website).

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