Adopting international reporting standards to enhance transparency and support fiscal policy
This presentation is the property of its rightful owner.
Sponsored Links
1 / 25

Adopting international reporting standards to enhance transparency and support fiscal policy PowerPoint PPT Presentation


  • 93 Views
  • Uploaded on
  • Presentation posted in: General

Adopting international reporting standards to enhance transparency and support fiscal policy . Abdul Khan Fiscal Affairs Department Presentation at the Regional Workshop on Financial Reporting and Management of Fiscal Risks in Astana, Republic of Kazakhstan, May 21-23, 2014.

Download Presentation

Adopting international reporting standards to enhance transparency and support fiscal policy

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Adopting international reporting standards to enhance transparency and support fiscal policy

Adopting international reporting standards to enhance transparency and support fiscal policy

Abdul Khan

Fiscal Affairs Department

Presentation at the Regional Workshop

on Financial Reporting and Management of Fiscal Risks

in Astana, Republic of Kazakhstan, May 21-23, 2014


Topics of this presentation

Topics of this presentation

Japan IMF Sub Acc

Why use international standards?

What does it mean to introduce international standards like IPSAS or IFRS?

Examples of countries that have introduced IPSAS or IFRS.

Lessons from other countries and other factors to keep in mind during introduction of IPSAS


Why use international standards 1 2

Why use international standards?(1/2)

  • Support transparency and oversight of public finances and policy decisions :

    • Consolidated “whole-of-government” statements would support policy making through fuller information on assets, liabilities, revenues, expenses, and cash controlled by government

    • Reporting assets more fully would improve transparency and provide basis for investment policies

    • Reports more credible, readily understood, and comparable world-wide


Why use international standards 2 2

Why use international standards?(2/2)

  • Savings from avoidance of need to issue and maintain own standards

  • Benefits from international expertise

  • Synergies in the preparation, audit, and analysis of financial reports

    • accounting professionals from private sector can be used to help with transition

    • Mobility between private and public sector


What does it mean to introduce ipsas

What does it mean to introduce IPSAS?

  • IPSAS provides standards for financial statements, including for specific transactions or assets and liabilities:

    • Tax revenues, PPPs, government guarantees etc

  • Implementation of IPSAS would involve

    • GAP analysis - “where we are?” Vs “where do we wish to be?”

    • Preparing a plan to implement

    • Management of implementation including change management


Ipsas implementation some issues to be aware of

IPSAS implementation: Some issues to be aware of ….

  • International Vs national

    • Some IPSAS activities may be seen to driven by issues that are not a concern in a particular country

    • Issues that may be important for a country may not be a global priority

  • To address these issues, countries (standard setters, MoF) should actively participate in IPSASB deliberations

    • attend meetings, review and comment on papers etc.


Costs of ipsas implementation data should be interpreted with caution

Costs of IPSAS implementation – data should be interpreted with caution

  • Cost information often includes costs of other reforms besides accrual accounting

  • Cost estimates for EU Member States fall within the range of 0.02-0.1 percent of GDP

  • Likely to vary according to the state of existing framework


Examples of countries that have introduced ipsas or ifrs

Examples of countries that have introduced IPSAS or IFRS

  • Switzerland and Austria introduced IPSAS with some exceptions

  • U.K., Australia, and New Zealand adopted IFRS with some exceptions

    • New Zealand decided to adopt IPSAS from 2014


Switzerland ipsas

Switzerland - IPSAS

  • New Accounting Model introduced 2007

  • Based on IPSAS

  • Budgeting and accounting on the same basis

  • Main exceptions to IPSAS

    • Employee pension liabilities not recognized, but disclosed as contingent liabilities

    • Consolidated financial statements of all controlled entities: phased approach adopted


Switzerland overview of financial statements

SwitzerlandOverview of financial statements


Austria ipsas

Austria: IPSAS

  • IPSAS mentioned in Organic BL (2009)

    • Part of comprehensive reform of budget framework

  • Budgeting and accounting on same basis

  • Main exceptions to IPSAS

    • Pension liabilities not recognized, but disclosed

    • Consolidated financial statements for controlled entities intended to be done in future


The united kingdom ifrs

The United Kingdom: IFRS

  • Adopted IFRS from 2009-10

    • IPSAS also used where appropriate.

  • Produces whole-of government consolidated financial statements; consolidates

    • Bank of England

    • some 1500 entities, including sub-national government entities

  • Main departure from IFRS

    • State-owned banks not consolidated

    • Network Rail not consolidated – in line with statistical, but not accounting standards


The u k reconciliation of wga and national accounts public sector net debt

The U.K: Reconciliation of WGA and National Accounts - Public Sector Net Debt


The u k reconciliation between the wga and national accounts current deficit

The U.K.: Reconciliation between the WGA and National Accounts: Current Deficit


Australia ifrs plus govt specific enhancements

Australia: IFRS (plus govt.-specific enhancements)

  • Whole of government accounts

    • Consolidates all controlled entities including “independent” entities (e.g., central bank, courts)

    • Harmonization of accounting and statistics: reduces confusion

  • Enhancements where IFRS does not deal with not-for-profit entity issues

    • non- exchange income (Tax) recognition


Australia gfs sector information in financial statements

Australia: GFS sector information in Financial Statements


Australia cash reporting is integral to accrual accounting

Australia: Cash reporting is integral to accrual accounting


The u s example

The U.S. example

Uses highly developed FASAB standards

Cash budgeting and accrual financial statements

Innovative and simplified presentation to improve communication of complex information


Usa nation by the numbers a snapshot of the government s financial position condition

USA: Nation by the numbersA Snapshot of the Government's Financial Position & Condition


U s a cash budget and accrual accounts

U.S.A: Cash Budget and Accrual Accounts


U s a reconciliation of cash budget and accrual accounts

U.S.A.: Reconciliation of Cash Budget and Accrual Accounts


Lessons from international experience a phased approach to implementation 1 2

Lessons from international experience: A phased approach to implementation (1/2)

  • May adopt some IPSAS during first phase, others during subsequent phases; for example

    • Financial assets and liabilities may be done in Phase 1, nonfinancial assets in Phase 2

      • Financial assets and liabilities can also be recognized progressively in phases

      • For example, tax revenue recognition may pose some challenges – therefore can defer it to Phase 2

    • Consolidated financial statements may be implemented in phases

      • Separate financial statements of central government can be done in Phase 1, partial consolidation can be done in Phase 2, and full consolidated statements can be done in Phase 3


Lessons from international experience a phased approach to implementation 2 2

Lessons from international experience: A phased approach to implementation (2/2)

  • Pilot implementation with some agencies may be considered

    • Helps identify issues and challenges before launching intro full implementation

  • IPSAS based financial statements may initially be produced on a trial basis

    • SAI can review but not audit trial statements;

    • Full audit during a subsequent “official” phase


Lessons from international experience change management is important

Lessons from international experience: Change management is important

Need a well thought out strategy, including objectives, conceptual framework, implementation phases

Communication with key stakeholders, including parliament, ministers, and other key executives/officials.

Training

Systems changes

Detailed plan of implementation


  • Login