IPSASB publishes five IPSAS based on the IASB's 'package of five'

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31 Jan 2015

The International Public Sector Accounting Standards Board (IPSASB) has published a series of five International Public Sector Accounting Standards (IPSASs) on accounting for interests in other entities. The five pronouncements are based on the 'package of five' standards issued by the IASB in May 2011 dealing with consolidation, joint arrangements, the equity method, separate financial statements and disclosure. However, the IPSASB made a number of amendments to the IASB's pronouncements to tailor them for the public sector.

The new standards IPSAS 34 Separate Financial Statements, IPSAS 35 Consolidated Financial Statements, IPSAS 36 Investments in Associates and Joint Ventures, IPSAS 37 Joint Arrangements, and IPSAS 38 Disclosure of Interests in Other Entities follow the IPSASB practice of, where relevant, developing its IPSAS based on IFRS, and follows a Memorandum of Understanding between the IASB and IFAC signed in November 2011, which among other objectives, seeks "to highlight financial reporting issues where alignment between the requirements of the IASB and the requirements of the IPSASB is necessary".

The new IPSAS are based on IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities, IAS 27 Separate Financial Statements and IAS 28 Investments in Associates and Joint Ventures, including the amendments made in 2012 in relation to transitional guidance and investment entities. The standards align with the requirements of these equivalent IASB pronouncements, except where departure is considered justified (e.g. modification of terminology, consideration of the interaction with the Government Finance Statistics and the System of National Accounts, reflection of differences between existing IPSAS and IFRS).

The new standards replace IPSAS 6 Consolidated and Separate Financial Statements, IPSAS 7 Investments in Associates and IPSAS 8 Interests in Joint Ventures. As these IPSASs were themselves largely based on previous IASB requirements, the changes from these standards are consistent with those faced by for-profit entities applying the 'package of five' IASB standards, e.g. a unified control model based on control and power, the elimination of proportionate consolidation, and numerous additional disclosures.

The standards are effective for annual financial statements covering periods beginning on or after 1 January 2017. Earlier application is encouraged, however, if an entity decides to apply the requirements early it shall disclose that fact and apply the whole series of standards (IPSAS 34 through IPSAS 38) at the same time.

All of the new standards can be accessed through the press release on the IPSASB website.

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