IPSASB eNews: June 2016 Meeting Highlights

Jul 07, 2016 | English

  1. Consultative Advisory Group
  2. Meeting Highlights Audio Podcast
  3. Public Sector Specific Financial Instruments
  4. Governance
  5. IPSAS 39, Employee Benefits
  6. Social Benefits
  7. Leases
  8. Update to Financial Instruments
  9. Heritage
  10. Impairment of Revalued Assets
  11. Revenue and Non-Exchange Expenses

1. Consultative Advisory Group

The IPSASB Consultative Advisory Group (CAG) held its inaugural meeting on Monday, June 20, prior to the IPSASB meeting. The CAG advises on IPSASB’s strategy, work program and agenda; projects from both technical and adoption and implementation perspectives; and other matters relevant to standard setting. The CAG discussed its role, method of operating, and value proposition. The CAG also made recommendations on IPSASB’s projects on Social Benefits, Revenue, and Non-Exchange Expenses.

 

2. Meeting Highlights Audio Podcast

An audio podcast reviewing key points of the June 2016 meeting is now available.

 

3. Public Sector Specific Financial Instruments

The IPSASB approved a Consultation Paper (CP), Public Sector Specific Financial Instruments. The main topics covered in the CP relate to the recognition and measurement of currency in circulation, monetary gold, and the International Monetary Fund quota subscription and special drawing rights. The CP will be published in July 2016 with a comment period end date of December 31, 2016. The IPSASB hopes that constituents directly involved in accounting for such transactions will share their views.

 

4. Governance

In the agenda session on governance:

  • Jón Blöndal (right), a member of the Public Interest Committee (PIC), provided an update on the March 2016 PIC meeting;
  • The IPSASB reviewed the Terms Of Reference for the changes mainly related to enhanced governance processes, and other changes related to past IFAC bylaw and constitutional reviews; and
  • The IPSASB received confirmation of approval by the PIC of the IPSASB’s Due Process and Working Procedures.

 

5. IPSAS 39, Employee Benefits

The IPSASB approved IPSAS 39, Employee Benefits, which will replace IPSAS 25, Employee Benefits, on January 1, 2018, with earlier adoption encouraged. IPSAS 39 reflects the amendments made by the International Accounting Standards Board to its equivalent standard, International Accounting Standard 19, Employee Benefits, up to December 2015 and removes the section on Composite Social Security Programs that exists in IPSAS 25. IPSAS 39 will be published in July 2016.

 

6. Social Benefits

The IPSASB reviewed the responses to the Consultation Paper, Recognition and Measurement of Social Benefits. The IPSASB agreed to progress the obligating event approach and the insurance approach; however, the social contract approach will not be progressed. The IPSASB agreed that the insurance approach will only be applicable to fully funded schemes, with preparers being referred to the forthcoming IFRS on insurance for the requirements.

 

7. Leases

The IPSASB approved a project brief on leases. The IPSASB formed a view that the recognition requirements of lessee accounting in IFRS 16 are appropriate for public sector financial reporting. The IPSASB considered that the appropriateness of the risks and rewards model for lessor accounting in IFRS 16 for public sector financial reporting is a key issue and directed staff to carry out in-depth analysis of the right-of-use model for lessor accounting and the relationship with IPSAS 32, Service Concession Arrangements: Grantor.

 

8. Update to Financial Instruments

Staff presented an education session on financial instruments to the IPSASB, highlighting areas of significant change introduced by IFRS 9 Financial Instruments. The IPSASB acknowledged that the project is an IFRS convergence project which will likely result in the issuance of a new standard to replace IPSAS 29, Financial Instruments, and amendments to IAS 32, Financial Instruments: Recognition and Measurement, and IFRS 7, Financial Instruments: Disclosure. The presentation given during the June 2016 meeting is available.

 

9. Heritage

The IPSASB reviewed draft chapters of its Consultation Paper (CP) on Financial Reporting of Heritage in the public sector. It supported a preliminary view that heritage items could be assets for financial reporting purposes. The chapter on measurement will be refocused on measurement for different heritage use objectives. In September, the IPSASB expects to review draft wording for its preliminary view on heritage assets and all chapters of the draft paper.

 

10. Impairment of Revalued Assets

The IPSASB approved IPSAS, Impairment of Revalued Assets (Amendments to IPSAS 21, Impairment of Non-Cash-Generating Assets, and IPSAS 26, Impairment of Cash-Generating Assets), which brings property, plant and equipment and intangible assets on the revaluation model within the scope of IPSAS 21 and IPSAS 26. The amendments have an effective date of January 1, 2018.

 

11. Revenue and Non-Exchange Expenses

The IPSASB considered an early draft of the Revenue and Non-Exchange Expenses Consultation Paper. The IPSASB discussed implementation issues related to IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers), and options for dealing with them, particularly multi-year financing, taxes received in advance, and services in-kind. The IPSASB also agreed that transactions without performance obligations should be given more prominence. The IPSASB agreed on a revised structure for the Consultation Paper that will bring out the performance obligation and present obligation approaches clearly and reduce duplication.

 
 
 

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