The IPSASB held its second meeting of the year from June 19-22, 2018 in Toronto, Canada.
1. Governance
4. Social Benefits: Insurance Approach, Recognition Measurement and Financial Sustainability Reporting
11. Meeting Podcasts
12. Next Meeting
13. Upcoming Dates
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.
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.
Audio podcasts highlighting key points of the June 2018 IPSASB and IPSASB CAG meetings are now available:
Exposure Draft, Improvements to IPSAS, 2018: Comments are due by July 15, 2018
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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