Interpretation and Application of IPSAS

A Practical, Authoritative Guide to IPSAS

Designed to promote enhanced quality and consistency in public sector accounting across the world, the International Public Sector Accounting Standards provide an accounting framework which can be followed by all public sector entities, including national and regional governments, local authorities and intergovernmental organizations.

Interpretation and Application of IPSAS is a practical guide to implementing the standards. Beginning with an analysis of the role of the International Public Sector Accounting Standards Board, it goes on to provide a complete description of each standard, along with plentiful case studies and examples demonstrating how to apply it in practice. Detailed guidance is also provided on managing the transition from local standards to IPSAS, under either accrual or cash accounting.

This practical focus makes Interpretation and Application of IPSAS the ideal resource for both current and potential adopters of the International Public Sector Accounting Standards.

"This book on the practical adoption and implementation of IPSAS for public sector entities will be a useful tool for both academic students at the undergraduate as well as the graduate level. In addition, its practical focus will enable practitioners and regulators to have access to a wide range of accounting examples and issues that public entities will face when moving towards IPSAS compliant financial reporting."
Gérard A. Melyon, Ph.D., Professor of Accounting, Sorbonne Universités, France

"This book enables the reader to better understand the practical application and implementation of IPSAS. The book offers multiple practical examples and case studies that help us to grasp the accounting issues that public sector entities are experiencing when moving towards IPSAS based accounting and financial reporting."
Isabel Brusca, Ph.D., Professor of Accounting, University of Zaragoza, Spain

Foreword vii

Acknowledgements ix

About the Authors xi

List of IPSAS with Corresponding IFRS xiii

List of IPSAS with Brief Description xv

Part 1 Introducing Public Sector Accounting

1 Introduction 3

2 Why Converge Public Sector Accounting Practices? 11

3 The IPSASB 17

Part 2 Accrual–based IPSAS

4 The IPSASB Conceptual Framework and Key Accrual Accounting Concepts 35

5 Financial Statements 55

6 Disclosure Standards 109

7 Long–Term (Non–Current) Assets 123

8 Current Assets 167

9 Service Concession Arrangements: Grantor 175

10 Leases and Leasing Arrangements 187

11 Revenues and Expenses 207

12 Employee Benefits, Social Benefits, and Other Liabilities 243

13 Provisions and Contingencies 257

14 Budget Reporting 271

15 Financial Instruments 285

16 Consolidations and Strategic Investments 307

17 Specific Standards: Accounting for Agriculture and Accounting in Hyperinflation Economies 327

18 Recommended Practice Guidelines (RPGs) 339

Part 3 Cash–Based IPSAS

19 Cash Basis IPSAS 351

Part 4 Making the Transition to IPSAS and Closing

20 Making the Transition to IPSAS 375

Conclusion 407

Annex 1: Brief Description of IPSAS 409

Annex 2: Key Characteristics of Public Sector Entities 413

Annex 3: Employee Benefits: An Overview of the Key Principles 415

Annex 4: Appendix to Chapter 21. Transition to IPSAS. Case Example: Iceland IPSAS Implementation Plan 417

Bibliography 425

Index