Adoption of International Public Sector Accounting Standards in 2020
From 1 January 2020, the entity will be applying IPSAs in preparation of its financial statements. IPSAS are a set of accounting standards issued by the International Public Sector Accounting Standards Board (IPSASB) with specific focus on the accounting and financial reporting requirements of governments, other public sector entities and Not-For-Profit Organisations. The development of the IPSAS has its origins in the accounting profession as a way to enhance the accountability and transparency of public sector financial reporting and strengthen Public confidence in public sector financial management. The IPSASB is an independent standard setting Board supported by the International Federation of Accountants (IFAC). The IPSASB issues IPSAS, guidance and other resources for use by the public sector around the world.
IPSAS aims to improve the quality of general purpose financial reporting by public sector entities, leading to better informed assessments of the resource allocation decisions made by governments, thereby increasing transparency and accountability.
(i) Government Ministries, Provinces and Spending Agencies will be required to prepare financial statements under the accruals IPSAS framework. The coverage includes Central Government, Local authorities and related government entities such as Agencies, Boards, Commissions and other related bodies;
(ii) All non-governmental public sector entities and not-for-profit organizations whose line of business is non-commercial in nature are required to use IPSAS for their general purpose financial reporting,
(d) Effective Date
(i) Government Ministries, Provinces and Spending Agencies for financial statements for periods ending on or after 31st December, 2022;
(ii) Non-governmental public sector entities and not-for-profit organizations for financial statements for periods ending on or after 31st December, 2020.
(iii)Earlier application is encouraged.
(e) Convergence with IFRS
IPSAS are based on the International Financial Reporting Standards (IFRS), formerly known as IAS. IFRS are issued by the International Accounting Standards Board (IASB). IPSASB adapts IFRS to a public sector context when appropriate. In undertaking that process, the IPSASB attempts, wherever possible, to maintain the accounting treatment and original text of the IFRS unless there is a significant public sector issue which warrants a departure.
Download the entire Adoption of the IPSAs document here.