IPSASB issues proposals in final phase of its public sector conceptual framework project

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18 Apr 2013

The International Public Sector Accounting Standards Board (IPSASB) has published a further exposure draft in its multi-phase Conceptual Framework project. The latest exposure draft deals with the concept of 'presentation' in general purpose financial reports (GPFRs), including general purpose financial statements of governments and other public sector entities, but also extending to additional information and reports that enhance, complement, and supplement the financial statements.

The proposals in Conceptual Framework Exposure Draft 4 (CF–ED4) Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities: Presentation in General Purpose Financial Reports, represent the fourth and final phase of the IPSASB Conceptual Framework project and follow on from an earlier Consultation Paper published in early 2012.

The first phase of the IPSASB's project was completed with the release of the first four chapters of the IPSASB Conceptual Framework project in January 2013, covering the role and authority of the framework, the objectives and users of general purpose financial reporting, qualitative characteristics of information included in general purpose financial reports, and the reporting entity. Exposure drafts dealing with the second and third phases of the project where issued in November 2012, covering the elements and recognition in financial statements, and the measurement of assets and liabilities in financial statements.

CF–ED4 explains the relationship between these other parts of the IPSASB Conceptual Framework and presentation concepts, doing so by proposing definitions of "presentation", "display" and "disclosure", and identifying three presentation decisions: selection, location and organisation.

The exposure draft explains that the concept of 'presentation' relates not only to how information is included within reports, but also which reports are necessary in addition to financial statements. Accordingly, it considers whether new reports are required, whether information should be moved between reports, and whether existing reports should be amalgamated in order to meet the objectives of financial information and qualitative characteristics.

The exposure draft considers 'displayed' information as conveying key messages, and so accordingly is kept concise and displayed prominently using techniques such as clear labelling, borders, tables and graphs. 'Disclosed information' then makes displayed information more useful through the provision of detail to assist in the understanding of it, but disclosed information is not considered a substitute for displayed information.

The document also explores decisions about what information needs to be reported, how information is selected for inclusion in a GFPR, the importance of location of information (both between reports and within each report), and how information should be organised.

CF–ED4 is open for comment until 15 August 2013. Click for IPSASB press release (link to IPSASB website).

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