IFAC’S International Public Sector Accounting Standards Board Launches Review of Cash Basis Reporting in Developing Countries

Posted by Michel Lazare

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) is undertaking a review of the International Public Sector Accounting Standard, “Financial Reporting Under The Cash Basis of Accounting” (the Cash Basis IPSAS). The Cash Basis IPSAS was first issued in January 2003 and subsequently updated in 2006 and 2007.

As the invitation letter of Erna Swart, IPSASB Deputy Chair and Chair of the Task Force for the Review of the Cash Basis IPSAS puts it: "The primary objective of the review is to identify the major technical issues that public sector entities in developing economies have encountered, or are anticipated to encounter, in implementing the Standard. The IPSASB will then consider whether the Standard should be modified in light of these difficulties and/or if further guidance on its application should be provided by the IPSASB. The review will also identify whether additional reporting requirements should be added to the Standard.

The IPSASB is particularly interested in drawing on the experience of those who have been involved in, or have advised on, the adoption of the Cash Basis IPSAS in developing economies or have otherwise had exposure to the Cash Basis IPSAS and can provide input to this review."

The deadline for responses to the questionnaire (below) is July 15, 2009.

Here is the full text of the press release, which contains the link to the questionnaire and the invitation letter:

IFAC’S International Public Sector Accounting Standards Board Launches Review of Cash Basis Reporting in Developing Countries

(New York/May 11, 2009) - Primary Objective Is To Identify Major Technical Issues for Governments and Other Public Sector Entities in Implementing the Standard

The International Public Sector Accounting Standards Board (IPSASB), an independent standard-setting board within the International Federation of Accountants (IFAC), has appointed a task force to review the International Public Sector Accounting Standard (IPSAS), Financial Reporting under the Cash Basis of Accounting. As part of the review process, it is asking those who have been involved in the adoption of the Cash Basis IPSAS in developing economies-or who have been exposed to the standard-to complete a questionnaire on their experiences, or anticipated experiences, with respect to implementation issues.

The questionnaire, along with an invitation letter that more fully explains the review process, can be downloaded from the IPSASB website at www.ifac.org/PublicSector/Projects.php#InProgress. These materials are available in English, Spanish, and French. Responses are invited by July 15, 2009 from interested parties, including Ministers of Finance and heads of finance departments or their equivalents, users of financial reports, advisors, and other relevant financial management and similar experts, including members of the international and national aid agencies.

According to IPSASB Chair Mike Hathorn, "While the IPSASB promotes the adoption of the accrual basis of accounting, it also recognizes that many governments adopt a form of cash or modified cash basis reporting, and it has a responsibility to support those jurisdictions in strengthening their cash basis financial reports." The Cash Basis standard, first issued in January 2003, was updated in 2006 and 2007, making the review very timely.

"The primary objective of the review is to identify the major technical issues that governments and other public sector entities in developing economies have encountered, or expect to encounter, in implementing the standard. This will provide input to IPSASB deliberations on whether the standard should be modified and/or if further guidance on its application should be provided," explains IPSASB Deputy Chair, Erna Swart, who is chairing the task force.

The questionnaire is the first step in the IPSASB task force review process. As a follow up, the task force will undertake more detailed discussions with a range of users, implementers, technical advisors, and others in a number of regions who have responded to the questionnaire.

About the IPSASB and IFAC
The IPSASB (www.ipsasb.org) is an independent standard-setting board within IFAC that focuses on the accounting and financial reporting needs of national, regional, and local governments, related governmental agencies, and the constituencies they serve. It addresses these needs by issuing and promoting benchmark guidance and facilitating the exchange of information among accountants and those who work in the public sector or rely on its work.

IFAC (www.ifac.org) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 158 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. Through its independent standard-setting boards, IFAC sets international ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

Comments

[Rose Waniha]

It is question rather than a comment.Is it mandatory to prepare annual report? What statements and reports are to be included in annual report? Currently we are reporting under cash basis of accounting