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September 1, 2017updated 03 Jan 2021 6:15pm

IPSASB releases two exposure drafts for consultation

By Stephanie Wix

The International Public Sector Accounting Standards Board (IPSASB) has published two exposure drafts, one on financial instruments, and one on non-exchange expenses.

Exposure draft 62 Financial Instruments is based on International Financial Reporting Standard (IFRS) 9 Financial Instruments, developed by the International Accounting Standards Board (IASB).

The proposed new standard will replace IPSAS 29 Financial Instruments: Recognition and Measurement through simplified financial asset classification and measurements, as well as updated impairment and hedge accounting models. The draft also includes appropriate public sector specific modifications and guidance. IPSASB intends to provide a three year implementation period for the new standard and early adoption will be permitted. Stakeholders should comment by 31 December 2017.

IPSASB has also published a consultation paper on accounting for revenue and non-exchange expenses, calling for comment by 18 January 2018. The paper addresses key IPSAS implementation issues such as maintaining IFRS convergence and gaps identified in accounting for non-exchange expenses. These issues relate to the recognition of revenue from capital grants and services in-kind, including the initial and subsequent measurement of non-contractual receivables; and subsequent measurement of non-contractual payables.

IPSASB chair Ian Carruthers said:  “This consultation paper provides an opportunity to address gaps in literature that have been identified in accounting for non-exchange expenses and the measurement of non-contractual receivables and non-contractual payables—such as taxes, fines and licenses.”

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