The aim of the project is to develop one or more IPSASs covering revenue transactions (exchange and non-exchange) in IPSASs.
The scope of this project is to develop new standards-level requirements and guidance on revenue to amend or supersede that currently located in IPSAS 9, Revenue from Exchange Transactions; IPSAS 11, Construction Contracts; and IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers).
IPSAS 9 and IPSAS 11 are based on the equivalent standards issued by the International Accounting Standards Board (IASB). The IASB has recently issued IFRS 15, Revenue from Contracts with Customers, which will replace IAS 11, Construction Contracts and IAS 18, Revenue. Responses to the recent IPSASB’s Work Plan consultation highlighted the need to maintain convergence with IFRS for those IPSASs based on the IASB’s standards.
Constituents have also identified some difficulties in understanding the interaction between IPSAS 23 and other IPSASs when transactions have both exchange and non-exchange aspects. The IPSASB has previously noted that IPSAS 23 might need to be reviewed following completion of the Conceptual Framework. In particular, the guidance in IPSAS 23 on when to recognize revenue and when to recognize liabilities should be reviewed for consistency with the Conceptual Framework. Responses to the recent Work Plan consultation suggested that respondents saw this project as the most significant project to maintain existing IPSASs.
Issues the project will consider include (but are not limited to):
- What are the similarities and differences between the approach in IPSAS 23 and IFRS 15?
- What type of modifications would be required for IFRS 15 to be suitable for application to a wide range of revenue transactions in the public sector?
- Should the distinction between exchange and non-exchange transactions be retained?
- How should time requirements in non-exchange transactions be accounted for?
- To what extent would an approach based on performance obligations, rather than present obligations, be appropriate for non-exchange transactions?