The IPSASB considered draft IPSAS 42, Social Benefits. The IPSASB made minor changes prior to approving IPSAS 42, which will be published in late January 2019. IPSAS 42 fills one of the last significant omissions in IPSASB’s literature. 

IPSAS 42 has an effective date of January 1, 2022. The IPSASB considered that this would allow sufficient time for preparers to make arrangements for the standard’s requirements. The effective date for IPSAS 42 is also intended to align with the effective date of application guidance on collective and individual services and emergency relief.

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The IPSASB considered draft Exposure Draft (ED) 67, Collective and Individual Services and Emergency Relief, which proposes application guidance to IPSAS 19, Provisions, Contingent Liabilities and Contingent Assets. Detailed discussion focused on emergency relief, with the Board distinguishing between emergency relief that is an ongoing activity of government, and emergency relief that responds to specific events. The IPSASB approved ED 67, which will be published in late January 2019.

ED 67 proposes that no provision for collective or individual services is recognized. Under certain circumstances emergency relief that responds to specific events may give rise to a provision. Entities apply IPSAS 19 in deciding whether to recognize a provision.

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The IPSASB discussed the responses to ED 66, Long-term Interests in Associates and Joint Ventures (Amendments to IPSAS 36, Investments in Associates and Joint Ventures) and Prepayment Features with Negative Compensation (Amendments to IPSAS 41, Financial Instruments).

The IPSASB approved the amendments proposed in ED 66 with no significant changes. The IPSASB also agreed to an effective date of January 1, 2022 in order to align with the effective date for IPSAS 41.

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The IPSASB supported the initial analysis of Public Sector Specific Financial Instruments (PSSFI) developed by its Financial Instruments Task Force. This analysis outlined which PSSFI meet the definition of a financial instrument in IPSAS 28, Financial Instruments: Presentation, for which non-authoritative guidance will be developed. Where an asset or liability does not satisfy the definition of a financial instrument, the Task Force will continue to evaluate the appropriate guidance for development.

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The IPSASB reviewed and modified newly developed application guidance for historical cost, replacement cost, fair value, and the cost of fulfillment. The IPSASB confirmed that it would issue a Consultation Paper including an outline ED, Public Sector Measurement. This will allow constituents to consider the IPSASB’s preliminary views on issues such as borrowing costs, transaction costs and fair value and to provide views on the format and structure of the envisaged IPSAS. 

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The IPSASB approved the scope of a draft ED that will provide requirements and guidance for transactions within the scope of  IFRS 15, Revenue from Contracts with Customers, and transactions that can be addressed through the Public Sector Performance Obligation Approach (PSPOA). In its discussions, the IPSASB also clarified the definition of ‘a binding arrangement’ and considered the terminology in IFRS 15 from a public sector perspective, deciding that the term ‘purchaser’ should replace ‘customer’.  In light of this decision, Staff will consider a suitable title for the draft ED. 

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Grants and Transfers - Time Requirements
The IPSASB tentatively decided that transactions with enforceable mechanisms that can be activated by the resource provider should be accounted for under the PSPOA. Revenue arising from transactions that are not enforceable is to be recognized when the revenue is receivable by the recipient. The intentions and expectations of resource providers are to be communicated via enhanced display and disclosure. Staff will develop options for consideration at the March 2019 meeting. The IPSASB also decided to stop using the term ‘term requirements’, as it implies enforceability when there may be none.

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The IPSASB reviewed a roadmap for further development of the Leases project in light of responses to ED 64, Leases. The IPSASB decided:
a) To confirm the tentative decision made in September to adopt the lessee accounting requirements in ED 64, Leases, subject to decisions on lessor accounting and concessionary leases;
b) Not to publish lessee accounting requirements based on ED 64 in the near future; and
c) To create a Task Force to consider all the issues raised by respondents.

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The IPSASB approved its Strategy and Work Plan 2019-2023 and an accompanying Consultation Summary. Both documents are planned for publication in February 2019. The finalized Strategy and Work Plan communicates the IPSASB’s strategic objective and five underpinning themes, as well as its forward Work Plan for the 2019-2023 period. The Consultation Summary highlights the key changes resulting from the consultation process, including the action arising from both written submissions and feedback from four regional roundtables.

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A podcast highlighting key points of the December 2018 meeting is now available here.

The next meeting of the IPSASB will be in Washington D.C., USA from March 12-15, 2019. For more information, or to register as an observer, visit the IPSASB website.

Good progress was made on the landmark Social Benefits IPSAS with a view to approval in December. The IPSASB made important decisions on disclosures, including to require a breakdown of expenditure on material schemes, narrative about whether a scheme meets the insurance accounting criteria, and a description of the demographic and economic factors that influence the expenditure on a scheme. The Obligating Event approach has been renamed the General Approach.

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The IPSASB discussed a draft ED, Collective and Individual Services and Disaster Relief, proposing additional guidance to IPSAS 19, Provisions, Contingent Liabilities and Contingent Assets. The IPSASB agreed to include relevant definitions in IPSAS 19, and decided that the ED should cover emergency relief more broadly, not just disaster relief.

The IPSASB decided that the Public Sector Performance Obligation Approach could be applied to non-exchange grants and transfers. Staff will further consider when a liability should be recognized, what constitutes enforceability and develop examples.

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The IPSASB discussed the responses to ED 65, Improvements to IPSAS, 2018. The IPSASB agreed to most of the amendments proposed in ED 65, with little or no change. However, the IPSASB agreed to amend paragraph 76 of IPSAS 16, Investment Property, to provide guidance on measuring investment property under construction at fair value initially, rather than deleting the paragraph as proposed in the ED. The IPSASB also agreed to an effective date of January 1, 2021 for the new cash flow disclosure added to IPSAS 2, Cash Flow Statements. The IPSASB approved Improvements to IPSAS, 2018.

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The IPSASB decided on the approach for development of Exposure Draft (ED), Measurement. The ED will define major measurement bases and provide guidance on, and how to derive measures, under these bases. Individual IPSAS will specify where these measurement bases are to be used. Next steps include development of application guidance for historical cost, replacement cost, fair value, and the cost of fulfillment and identification of generic measurement-related disclosures. The majority of the text of IFRS 13, Fair Value Measurement, will be adopted as application guidance in IPSASB’s literature. The IPSASB also further developed the Consultation Paper (CP), Public Sector Measurement. 

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The IPSASB considered the terminology in IFRS 15, Revenue from Contracts, from a public sector perspective. The IPSASB decided that the term ‘binding arrangement’ should replace ‘contract’. However the terms ‘consideration and exchange’ and ‘goods and services’ will be retained. Staff will provide alternatives to ‘customer’. Explanatory text will note that the ‘expected cost plus margin method’ for estimating stand-alone selling prices can be used for goods and services that are provided on a cost-recovery basis. The Board decided that the ability to reduce future funding would be included as a potential enforcement mechanism.

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The IPSASB considered the responses to ED 64, Leases for the first time. There was overall support for ED 64’s proposal for the ‘right-of-use model’ on lessee accounting. The IPSASB tentatively decided to adopt the model in the IPSAS on Leases. The IPSASB acknowledged the diversity and complexity of constituents’ views on the proposals on lessor accounting and concessionary leases and decided to extend the timeline of the project in order to allow a detailed discussion of all the issues raised by respondents.

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The IPSASB supported the approach, which its Financial Instruments Task Force is following for Public Sector Specific Financial Instruments. This involves the development of non-authoritative guidance in the core Financial Instruments standards where the transaction meets the definition of a financial instrument in IPSAS 41, Financial Instruments, and  non-authoritative guidance outside the core Financial Instruments standards where that definition is not met. Following a face-to-face Task Force meeting in October 2018, Task Force recommendations will be presented to the IPSASB at future meetings.  

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The 2018 Handbook of International Public Sector Accounting Pronouncements is now available for electronic download on the IPSASB website. The 2018 Handbook includes the revised Cash Basis IPSAS. Hard copy editions will be available for purchase in November.

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The IPSASB discussed feedback received on the Strategy and Work Plan 2019-2023 consultation; including input from the four regional roundtables and the 53 formal comment letters submitted. Overall, the IPSASB concluded that the inclusive approach followed in developing the consultation proposals, and the open outreach process using roundtables during the consultation period, have contributed to the strong support for key proposals. The IPSASB will continue to work to finalize the Strategy and Work Plan 2019-2023 by discussing it with the Consultative Advisory Group and The Public Interest Committee over the next month, and will look to approve the Strategy and Work Plan at its December 2018 meeting. 

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The IPSASB seeks nominations from individuals, or representatives from organizations, interested in serving as a member of the IPSASB Consultative Advisory Group (CAG). Nominations are due by October 31, 2018. More information on the role of the CAG and the types of skills and experience nominees should have can be found here: https://www.ipsasb.org/cagnom

A podcast highlighting key points of the September 2018 meeting is now available:

• Audio version
• Video version

The next meeting of the IPSASB will be in Kuala Lumpur, Malaysia from December 4-7, 2018. The CAG will meet on December 3, 2018, also in Kuala Lumpur. For more information, or to register as an observer, visit the IPSASB website.

In January 2018, IFAC released Focusing on Performance, which raises awareness of the importance good corporate governance practices and principles for PAOs. This new article series features PAO stories from across the globe on the importance of adapting governance arrangements to drive performance while considering current and past governance arrangements.

Read first-hand experiences from PAOs in Barbados, the Bahamas, Kosovo, and the Cayman Islands on key issues such as succession planning, balancing board and executive management responsibilities, and committee restructuring. Stay tuned for more stories coming from the Philippines, Costa Rica and more!

Don’t forget these additional resources to help support your PAO’s good governance review and planning:

• Establishing Governance: A Guide for PAOs
• Focusing on Performance: Principles for Effective PAO Governance
• Supporting Accountants in Business: Self-Assessment Tool for PAOs
• United, Connected, and Aligned: How the Distinct Roles of Internal Audit and the Finance Function Drive Good Governance

Does your PAO have experience driving corporate governance reforms to enhance performance? Let us know—we would love to showcase your work in action!

• New Syllabus for Institute of Chartered Accountants (Ghana)
  ICAG launched a newly revised syllabus for its professional examinations. The revisions reflect changing trends in the global economy and professional educational and align with the revised International Education Standards’ requirements. Key highlights of the new syllabus>>
• A Quality Alliance: Uniting for Quality Assurance Reviews in Panama
  The Colegio de Contadores Públicos Autorizados de Panamá has been a driving force in establishing Panama’s Quality Alliance, a voluntary QA review mechanism. Read CCPAP’s QA review journey in English and Spanish>>
• Brazil Enhances Transparency and Accountability with Convergence of IPSAS
  The Federal Accounting Council has forged a partnership with the National Treasury Secretariat to implement a conceptual framework for the convergence of Brazilian standards with International Public Sector Accounting Standards. Through the partnership, it is expected that Brazil will fully adopt and implement IPSAS by 2024. Learn more about Brazil’s progress (in Portuguese)>>
• Malaysian Institute of Accountants Launches Technology Blueprint
  MIA launched its MIA Digital Technology Blueprint at its inaugural AccTech Conference 2018. The guidance and the conference are both part of the institute’s ongoing initiatives to future-proof the Malaysian accountancy profession and provide more value to the ecosystem.

A Future-ready Accountancy Profession
As professional accountants and PAOs are preparing for the future, there is an emphasis on implementing a comprehensive, integrated approach to international accountancy education to equip current and future professional accountants with the skills, capabilities and ethical foundation required for a rapidly changing environment. IFAC has been speaking out on this topic alongside partners such as the Institute of Chartered Accountants of the Caribbean, the PAO Development Committee, the World Bank, and the Interamerican Accounting Association

Greater Cooperation, Greater Growth
IFAC continues to convene key groups and partake in knowledge-sharing opportunities in order to identify, debate, and seek solutions to key issues and challenges. In 2018, IFAC continued to advocate for greater collaboration between PAOs and firms in Asia-Pacific, amongst PAOs in the Western Balkans, and among accountant generals, auditor generals, and PAOs in Sub-Saharan Africa. By leveraging and sharing global experiences and resources, the accountancy profession worldwide will continue to be strengthened.

Albania, Belarus, Croatia, Ecuador, Georgia, Haiti, Mexico, Paraguay, Suriname, Uruguay, Ukraine, and Zimbabwe: 2018 has been a busy year for engagement and efforts to strengthen and develop PAOs and advance economies. Meetings with key accountancy stakeholders, such as PAOs, regulators, universities, and audit oversight entities, in these countries have been essential in furthering national accountancy regulations alignment with international standards and best practices. 2018 will close out with meetings and events in Australia, Guatemala, Mozambique, Sri Lanka, and the UK.

The International Code of Ethics for Professional Accountants (including International Independence Standards) is now completely rewritten, easier to use, navigate and enforce. Beyond its new structure, the new Code brings together substantive revisions to ethics and independence provisions and clarifies how professional accountants should apply the conceptual framework to comply with the fundamental principles of ethics, and where applicable, be independent. The new Code will be effective June 2019.

Does your PAO want to proactively reproduce, share, and/or translate the revised Code in advance of the effective date? Submit a permissions request here!

• PAO Development Committee Meeting, October, New York, US
• Compliance Advisory Panel Meeting, October, New York, US
• PAO Forum, October, Colombo, Sri Lanka
• World Congress of Accountants, November 2018, Sydney, Australia—register today!

• IFAC Statements of Membership Obligations
• Submit a Permissions Request

The IFAC Quality & Development Team supports IFAC member organizations’ efforts to adopt and implement international standards (thus improving SMO fulfillment) and build the capacity of the global accountancy profession.

The team manages the Member Compliance Program and the membership admission process, PAO Capacity Building Program, including the PAO Development Committee, Accountability. Now. and sustainable accountancy development efforts. The Member Compliance Program is overseen by the Compliance Advisory Panel and the Public Interest Oversight Board as one of IFAC’s public interest activities.
Questions? Contact us at compliance@ifac.org.

The effective date for the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) is less than a year away. Check out our dedicated webpage for the latest resources and tools to support its adoption and implementation, including, Bases for Conclusions, PowerPoint Slides, and videos describing the Code’s key aspects.

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The topics of non-assurance services and professional skepticism were on the table in four well-attended global roundtables held in Washington DC, USA (June 11); Paris, France (June 15); Tokyo, Japan (July 12); and Melbourne, Australia (July 16). More than 150 senior representatives of our stakeholders provided great feedback, which helped inform the development of project proposals on those topics.

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We’re excited! Download the PDF or order your print copies of the 2018 edition of the IESBA handbook, which contains the entire revised and restructured Code, including the revised inducement provisions that were released in July 2018.

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One year on, the agenda for our 2^nd annual joint session builds on the promise of the first—enhanced IESBA and IAASB connectivity and coordination that better serves the public interest. Incoming CEO of IFAC, Kevin Dancey, will be our guest speaker.

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• December 3-5, 2018: IFAC Offices, New York
• March 11 - 13, 2019: IFAC Offices, New York
• June 17 - 20, 2019: TBC
• September 16 - 19, 2019: AICPA Offices, New York
• December 3 - 6, 2019: IFAC Offices, New York

Read the minutes and working papers for all our IESBA meetings. They’re a great information source about project progress and how we support and protect the public interest.

The IESBA’s multi-stakeholder Consultative Advisory Group (CAG) meets a week before the board to provide strategic input on our meeting agenda materials, as well as our projects and initiatives more broadly. You can also read all the CAG’s minutes and working papers.

The Chair of the IPSASB Consultative Advisory Group (CAG) provided an overview and update of the June 18, 2018 CAG meeting held in Toronto. The CAG meeting agenda, papers and presentations are available online here.

The IPSASB reviewed the recommendations developed by the Financial Instruments Task Force to address the responses to ED 62, Financial Instruments. The IPSASB agreed that the recommendations addressed the concerns raised by stakeholders and approved IPSAS 41, Financial Instruments. IPSAS 41 will have an effective date of January 1, 2022. 

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The IPSASB discussed responses to ED 63, Social Benefits, beginning with its scope and definitions. The IPSASB noted that while respondents generally supported the scope of ED 63, a number considered that some definitions of key terms need to be clearer. The IPSASB agreed to retain the scope proposed in ED 63, but to clarify some definitions. In particular, the definition of social benefits will refer to cash transfers. In the context of non-exchange expenses a definition of collective services will also be developed.

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The IPSASB continued to review other issues raised by respondents to ED 63, Social Benefits. The IPSASB agreed that the insurance approach should remain optional. The IPSASB will not develop mandatory requirements for financial sustainability reporting.

On recognition and measurement, there was roughly equal support for both the proposals in ED 63 and the Alternative View. The IPSASB agreed to proceed on the basis of the proposals in ED 63 and will further discuss the possibility of post implementation reviews more broadly.

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The IPSAB decided that, in dealing with commercial-style transactions, there are no major public sector issues that warrant departure from IFRS 15, Revenue from Contracts with Customers. As a result, the only changes that will be made are to terminology. IFRS 15 introduces some new definitions, and the IPSASB discussed how to incorporate these into a new IPSAS in order to ensure that the definitions reflect the public sector context. The IPSAS that is being developed will replace IPSAS 9, Revenue from Exchange Transactions and IPSAS 11, Construction Contracts.

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The IPSASB decided to proceed with the Public Sector Performance Obligation Approach for transactions with performance obligations, which do not have the characteristics to be accounted for under an IPSAS IFRS 15- aligned standard. The Board agreed that Steps 1 and 2 of the performance obligation approach model will require careful consideration, as these steps drive the rest of the five-step model.

Application of the PSPOA to non-exchange expenses depends on whether the transferor entity has an asset for the services, which the recipient will provide. The IPSASB will discuss this issue further at its September meeting.

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The IPSASB agreed to include guidance on accounting for social contributions in an amended IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers). Social contributions and similar compulsory levies will be accounted for using the same principles as taxation revenue.

Following discussion, the IPSAB decided not to amend the existing discretionary recognition requirements in IPSAS 23 for services in-kind. The IPSASB decided to add an encouragement for entities to disclose qualitative information on volunteer services received.

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The IPSASB confirmed that no liability to the public for collective services arises prior to the delivery of those services. The IPSASB agreed to provide guidance on this issue through a narrow scope amendment adding application guidance to IPSAS 19. The IPSASB also agreed to extend this guidance to universally accessible services.

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The IPSASB provided instructions on development of a flow chart on the subsequent measurement of assets. A table of equivalence comparing and contrasting terms from IPSAS, International Valuation Standards, and the Government Finance Statistics Manual will be further developed. The IPSASB directed the Financial Instruments Task Force to provide a recommendation on public sector modifications to IFRS 13, Fair Value Measurement, so that requirements and guidance from IFRS 13 can be included in a future ED, Measurement. The IPSASB held a preliminary discussion on the subsequent measurement of liabilities.

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The IPSASB decided to replace the IPSAS-IFRS Tracking Table with the IPSAS-IFRS Alignment Dashboard as a standing agenda item. The IPSASB decided to adopt provisionally the term ‘alignment’ instead of ‘convergence’ in the context of standards drawn from IFRS but will make a final decision at its September meeting, when reviewing the comments on the Strategy and Work Plan consultation.

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Audio podcasts highlighting key points of the June 2018 IPSASB and IPSASB CAG meetings are now available:

• IPSASB
• IPSASB CAG

The next meeting of the IPSASB will be in Toronto, Canada from September 18-21, 2018.  For more information, or to register as an observer, visit the IPSASB website.

Exposure Draft, Improvements to IPSAS, 2018: Comments are due by July 15, 2018

The IPSASB discussed responses to the Consultation Paper (CP), Accounting for Revenue and Non-Exchange Expenses. For Revenue, the IPSASB agreed that a converged IFRS 15, Revenue from Contracts with Customers, should be developed to replace IPSAS 9, Revenue from Exchange Transactions, and IPSAS 11, Construction Contracts. It was also decided that IPSAS 23, Revenue from Non-Exchange Transactions (Tax and Transfers), should be revised. 

Staff will also further develop the Public Sector Performance Obligation Approach for discussion at the June 2018 meeting. Accounting for capital grants and services in-kind was also discussed. 

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The IPSASB discussed responses to the IPSASB’s preliminary views on non-exchange expenses in the Revenue and Non-Exchange Expenses CP, and noted the views on interactions with other projects. The IPSASB directed staff to further develop key definitions, as well as the Public Sector Performance Obligation Approach from an expenses perspective, for consideration at the next meeting.

Staff presented the responses to the proposals on non-contractual receivables and payables. The IPSASB agreed to discuss these again when further progress has been made on other issues.

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Staff presented on Exposure Draft (ED) 63, Social Benefits, highlighting key issues that are expected to be relevant to the Non-Exchange Expenses project. The IPSASB noted in particular that the definitions of social benefits, universally accessible services and collective services were critical and would need to be discussed at the June meeting.

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The IPSASB approved ED 65, Improvements to IPSAS, 2018, which includes both IPSAS-specific improvements as well as others to maintain convergence with IFRS. This latter group draws on the IASB’s recent improvements and narrow scope amendment projects as well as recent IFRICs.

A second ED incorporating IASB amendments related to IFRS 9 was also approved and will be issued once the IPSASB’s new Financial Instrumentsstandard is issued.

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The IPSASB reviewed draft wording for several sections of the ED, Measurement, and the first three chapters of the CP, Public Sector Measurement. The IPSASB formed a preliminary view that borrowing costs related to the acquisition, construction, or production of qualifying assets should be expensed. 

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The IPSASB reviewed responses to ED 62, Financial Instruments, and respondents strongly supported the principles in the ED on classification, impairment and hedging. Respondents primarily requested further clarity on the application of these principles to complex transactions. 

The IPSASB agreed that the Financial Instruments Task Force should consider the issues raised by respondents and propose changes, where appropriate, to the draft standard. The Task Force’s recommendations will be considered at the June IPSASB meeting.

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James Gunn, Managing Director, Professional Standards, summarized the key discussions with the Public Interest Committee (PIC) on February 28 in Paris, France.

Further information on past meetings of the PIC and an overview of their activities can be found on their website. The agenda for the most recent meeting can be accessed here.

An audio podcast highlighting key points of the March 2018 meeting is now available.

The next meeting of the IPSASB will be in Toronto, June 19-22, 2018. For more information, or to register as an observer, visit the IPSASB website.

Exposure Draft 63, Social Benefits: Comments are due by March 31, 2018.

The IPSASB Proposed Strategy and Work Plan 2019-2023: Comments are due by June 15, 2018. 

The IPSASB Consultative Advisory Group will meet in Toronto, Canada on June 18, 2018.

Exposure Draft 64, Leases: Comments are due by June 30, 2018.

The IPSASB approved Exposure Draft (ED) 64, Leases. ED 64 will be issued in January with a consultation period until June 30, 2018. ED 64 proposes a single right-of-use model for lease accounting specifically designed for public sector financial reporting. It also proposes requirements and guidance on concessionary leases for both lessors and lessees.

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The IPSASB agreed on outlines for the Public Sector Measurement Exposure Draft and Consultation Paper, which will address the measurement of assets and liabilities, including non-current assets held for sale and discontinued operations. The Board took a tentative view that fair value, as defined in IFRS 13, Fair Value Measurement, can be applied in the public sector where a non-entity specific exit value is appropriate.

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The IPSASB reviewed responses to its Consultation Paper, Financial Reporting for Heritage in the Public Sector. The main issues raised by constituents related to the measurement of heritage assets. The Task Force on Public Sector Measurement will next develop measurement principles. The Heritage Task Force will then consider application guidance for heritage measurement. 

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The Board received an update on the CAG’s discussion of the Infrastructure Assets project, which raised several new issues, including the accounting treatment of land under water (e.g., dams and reservoirs) and asset retirement obligations.
The IPSASB will next consider Infrastructure Assets at its December 2018 meeting. Staff will continue with research and will develop and issue a survey to gain constituent views on the main issues in accounting for infrastructure assets.

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The IPSASB approved a consultation document with its proposed Strategy and Work Plan 2019-2023. It will be published in January 2018, with a comment period until June 15, 2018. The consultation document proposes strategic priorities and additional projects for the period. The IPSASB will undertake a number of outreach activities to obtain input from constituents in the February-June 2018 period. Please watch for the publication and provide your feedback via comment letter.

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The IPSASB carried out an in-depth review of its current work plan and agreed on a revised plan that runs through 2021. The IPSASB will review the plan at each meeting and will carry out a more detailed review at its final meeting of the year. The IPSASB will also align this review in December 2018 with approval of the 2019-2023 Strategy and Work Plan.

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• The next meeting of the IPSASB will be in New York, March 6-9, 2018. For more information, or to register as an observer, visit the IPSASB website.

• December 31, 2017: Consultation period for ED 62, Financial Instruments, ends.
• January 15, 2018: Consultation period for Consultation Paper, Revenue and Non-Exchange Expenses, ends.
• January, 2018: Strategy and Work Plan 2019-2023 Consultation Paper and ED 64, Leases, to be issued.
• March 31, 2018: Consultation period for ED 63, Social Benefits, ends.

The IESBA further deliberated significant comments received on the Exposure Draft of Phase 2 of the project, Improving the Structure of the Code of Ethics for Professional Accountants—Phase 2 (Structure ED-2). As part of its deliberation, the IESBA considered a first draft of revisions to the proposed text included in Structure ED-2 and consistency refinements to the agreed-in-principle text of Phase 1. Topics discussed include: the usage of the terms “may” and “might” and their descriptions in the restructured Code; distinguishing between “firm” versus “network firm,” primarily in the International Independence Standards; and the proposed effective date. The IESBA broadly supported the direction of the Structure Task Force’s proposals. The IESBA asked that the Task Force continue to liaise with the Safeguards Task Force to undertake a consistency review of the proposed texts to be included in the restructured Code before the next meeting.

Next Steps: At the December 2017 meeting, the IESBA will consider the final drafts of the texts of Phases 1 and 2 of the restructured Code, with a view to approval.

The IESBA further deliberated significant comments received on the Exposure Draft of Phase 2 of the project, Proposed Revisions Pertaining to Safeguards in the Code—Phase 2 and Related Conforming Amendments (Safeguards ED-2), and related Task Force responses. The IESBA also was briefed on the outcome of the Task Force’s July 2017 teleconferences with regulatory stakeholders who responded to Safeguards ED-2, and the IFAC Small and Medium Practices Committee. As part of the discussion, the IESBA considered a first draft of revisions to proposed Section 600, Provision of Non-assurance Services to an Audit Client, as well both conforming and consistency changes to safeguards-related provisions in other sections of the proposed restructured Code.

Among other matters, the IESBA discussed the adequacy and appropriateness of the provisions for evaluating and addressing advocacy threats; and whether additional guidance is needed in the Code to explain two things:

(1)   The meaning of the term “appropriate professional” used in examples of actions that might be safeguards.

(2)   How professional accountants and firms should determine whether an action is effective in reducing a threat to an acceptable level, and therefore qualify as a safeguard.

Next Steps: At the December 2017 meeting, the IESBA will consider a final draft of the safeguards provisions and related conforming amendments, with a view to approving them for inclusion in the restructured Code.

Applicability

The IESBA further deliberated significant comments received on the Exposure Draft, Proposed Revisions to Clarify the Applicability of Provisions in Part C of the Extant Code to Professional Accountants in Public Practice (Applicability ED), and related Task Force responses.

The IESBA supported the Task Force’s proposed revisions, which incorporated the feedback received from IESBA members during its June 2017 meeting. Topics discussed include matters relating to the project scope and the nature of the illustrative examples of how the Applicability provisions in Part 2, Professional Accountants in Business, of the restructured Code would operate in the context of the work of professional accountants in public practice.

At the December 2017 meeting, the IESBA will consider a final draft of the applicability provisions, with a view to approving them for inclusion in the restructured Code.

Restructuring

The IESBA considered revisions to the proposed restructured text of the provisions in extant Part C, Professional Accountants in Business, included in the March 2016 close-off document, in reference to the comments received from respondents to Structure ED-2 and Safeguards ED-2. The IESBA was generally supportive of the Task Force’s proposals, subject to any further structure- or safeguard-related refinements.

At the December 2017 meeting, the IESBA will consider a final draft of the restructured text, with a view to approval for inclusion in the restructured Code.

In light of the comments received from respondents on Structure ED-2, the IESBA considered revisions to the proposed restructured text relating to its NOCLAR pronouncement. The IESBA was generally supportive of the Task Force’s proposals, subject to any further structure- or safeguard-related refinements.

At the December 2017 meeting, the IESBA will consider a final draft of the restructured text, with a view to approval for inclusion in the restructured Code.

In light of the comments received from respondents on Structure ED-2 and Safeguards ED-2, the IESBA considered revisions to the proposed restructured text relating to its Long Association close-off document. The IESBA was generally supportive of the Task Force’s proposals, subject to any further structure- or safeguard-related refinements.

Next Steps: At the December 2017 meeting, the IESBA will consider a final draft of the restructured text, with a view to approval for inclusion in the restructured Code.

The IESBA considered significant comments raised by respondents on the May 2017 Exposure Draft (ED), Proposed Application Material Relating to Professional Skepticism and Professional Judgment, and related Task Force responses. The IESBA broadly supported the direction of the changes to the proposed application material in response to the feedback from respondents, subject to refinements and consideration of whether the description of the term “professional judgment” has been fully aligned with that in the International Auditing and Assurance Standards Board (IAASB)’s standards.

The IESBA also was briefed on comments made during the September 2017 IESBA Consultative Advisory Group (CAG) meeting, and by some respondents to the ED regarding the IESBA’s longer term professional skepticism initiative. The longer term initiative will explore, among other matters, whether aspects of the concept of professional skepticism apply to all professional accountants, including those who are not auditors or assurance practitioners.

At the December 2017 meeting, the IESBA will consider a revised draft of the proposed application material relating to professional skepticism and professional judgment, with a view to approval for inclusion in the restructured Code. The IESBA will also receive an update on the longer term professional skepticism initiative.

The IESBA considered the results from the April 2017 Strategy and Work Plan survey and the IESBA Planning Committee’s initial analysis and preliminary considerations relating to the survey responses. The IESBA also considered the input received from the CAG regarding priority topics to address in the next strategy period. The IESBA broadly supported the Committee’s initial analysis, and provided feedback on potential topics for prioritization and related considerations in developing the draft strategy consultation paper.

Next Steps: At the December 2017 meeting, the IESBA will consider a first draft of the consultation paper.

Recognizing the increasing need for coordination between the IAASB and IESBA, the two boards held a joint sessions for the first time. Among other matters, the two boards were briefed on areas requiring or potentially requiring coordination, and a proposed approach to coordination, which they broadly supported subject to refinements. The boards agreed to form a joint working group to address the objectivity of engagement quality control reviewer. They also discussed how best to achieve alignment of their future strategies and work plans while respecting their independence, including how to align their strategy periods.

The boards agreed to meet again in joint session in the second half of 2018.

The next physical meeting of the IESBA will be held in Livingston, Zambia, December 4-8, 2017.

The IPSASB approved Exposure Draft (ED) 63, Social Benefits, which will be issued at the end of October with the consultation period running until March 31, 2018. ED 63 proposes the obligating event approach, in which liabilities are recognized when the eligibility criteria for the next benefit (including being alive) is satisfied. The ED also includes an optional insurance approach and stipulates that entities are required to disclose projected cash flows for schemes for the next five years.

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The IPSASB approved a revised standard, Financial Reporting under the Cash Basis of Accounting (the Cash Basis IPSAS). The revisions, which are intended to make implementation of the Cash Basis IPSAS easier, recast as encouragements rather than requirements: the preparation of consolidated financial statements, disclosure of information about external assistance, and payments made by third parties. The revised Cash Basis IPSAS will be applicable from January 1, 2019 with early adoption encouraged.

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The IPSASB discussed a firstdraft of its consultation document forthe Strategy and Work Plan 2019–2023, which it expects to issue in January 2018. The consultation document was informed by outreach and engagement with constituents, the IPSASB’s oversight body the Public Interest Committee, and the IPSASB Consultative Advisory Group. The IPSASB plans to hold regional roundtables in the first half of 2018 to ensure broad engagement with constituents on the consultation document.

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For measurement of concessionary leases, the IPSASB decided that the lessor’s underlying asset should be measured in accordance with the relevant IPSAS. The IPSASB directed staff to further analyze three options of accounting for the subsidized component of concessionary leases by lessors. The three options are to recognize the subsidized component of a concessionary lease (i) as a liability (unearned revenue), (ii) directly in net assets/equity, or (iii) not to recognize the subsidized component. Under options (i) and (ii), an expense for the subsidized component would also be recognized by a lessor, while an expense for the subsidized component would not be recognized under option (iii).

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The IPSASB decided that measurement of heritage and infrastructure assets should be addressed in the Public Sector Measurement project and has directed the Task Force and staff to develop a consultation paper that includes a preliminary exposure draft. This exposure draft will propose an approach to measurement and will include advice on addressing public sector-specific needs, as well as the extent to which IFRS 13, Fair Value Measurement, should be drawn upon.

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The IPSASB agreed upon an approach for the Infrastructure Assets project, which involves further research to determine the difficulties preparers encounter when applying IPSAS 17, Property, Plant and Equipment. After this research phase, a final project proposal will be presented with envisaged outputs. Staff will update the CAG and IPSASB on the progress of the research at the December 2017 meeting.

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The 2017 Handbook of International Public Sector Accounting Pronouncements is now available for electronic download on the IPSASB website. The 2017 Handbook includes the new standards IPSAS 39, Employee Benefits and IPSAS 40, Public Sector Combinations. Hard copy editions will be available for purchase in November.

A podcast highlighting key points of the September 2017 meeting is now available.

The next meeting of the IPSASB will be in Toronto from December 5-8. The Consultative Advisory Group will hold its second meeting of the year in Toronto on December 4. For more information, or to register to attend a meeting as an observer, visit the IPSASB and CAG websites.

• December 31, 2017: Consultation period for ED 62, Financial Instruments, ends
• January 15, 2018: Consultation period for Consultation Paper, Revenue and Non-Exchange Expenses, ends

A report by IFAC and the International Organisation for Economic Co-operation and Development (OECD) explores accounting and budgeting practices at the national government level in OECD countries. It concludes that nearly three-quarters of OECD countries have adopted accrual accounting for their year-end financial reports and more than a quarter now prepare their annual budgets on an accrual basis.

While there is low direct adoption by national governments of international accounting standards, such as the International Public Sector Accounting Standards (IPSAS) or International Financial Reporting Standards (IFRS), many standard setters use IPSAS or IFRS as primary or explicit references for developing their national standards.

For years, Caribbean countries have been motivated to incorporate international accounting standards into their national regulations. Accrual Accounting Practices and Reform Expectations in the Caribbean, a survey organized by the Institute of Chartered Accountants of the Caribbean (ICAC), IFAC and the World Bank, charts the state of the region’s public financial management (PFM) reforms. It facilitates a better understanding of reform designs, implementation challenges, and associated benefits.

After reported reforms are implemented, the regional balance will move toward accrual-based accuonting with nine of the surveyed countries expected to implement IPSAS and another six to use N-IPSAS.

Commissioned by IFAC and the World Bank, Professor Emeritus Alain Burlaud examines the status of public sector financial reporting in 18 Francophone African countries, highlighting the urgent need to improve public financial reporting quality and increase the number of professional accountants in the region.

June 6-9 – Mexico City, Mexico
IFAC actively supported the 10^th Regional CReCER Conference on Accounting and Accountability for Regional Economic Growth: Fostering Trust for Regional Economic Growth. The conference reflected the need for trust in both government and the private sector to help manage public resources more effectively.

November 21-22 – Buenos Aires, Argentina
As part of Open Government Week, this meeting will bring over 2,000 representatives from governments and civil society, digital innovators, journalists, and researchers to further the open government agenda in the face of current global challenges. IFAC will present its new International Public Sector Financial Accountability Index to stimulate PFM reform and will engage with regional representatives to further update the Index with information from their respective countries.

Developed in partnership with members of the Global Initiative of Fiscal Transparency (GIFT) Network, including IFAC, the OECD’s Budget Transparency Toolkit offers a gateway to global budget and fiscal transparency institutions. It also highlights official instruments, standards, and guidance materials and demonstrates how these tools can be applied across various areas of the budgeting cycle.
Read more from OECD Deputy Head Ronnie Downes.

As part of its Better Government Series, the Institute of Chartered Accountants in England and Wales (ICAEW) recently issued a practical "how-to" guide which sets out six practical building blocks to improve the quality of public financial reporting and public financial management.

CIPFA has developed this interactive portal to support a diverse range of information and tools dedicated to the shared aim of strengthening PFM worldwide.

In a very timely piece, the Association of International Certified Professional Accountants (AICPA) outlines the role of management accountants in establishing best practices for combatting fraud and corruption in their organization.