IPSASB Meeting (June 2021) Agenda Item A.3 IPSAS–IFRS Alignment1 Dashboard2 Current IPSAS-IFRS Alignment Overview Degree of Public Sector Specificity IPSAS with minor public sector guidance added d (public sector terminology and minor modifications) IPSAS with public sector guidance added (public sector terminology and modifications) c Public sector specific IPSAS with b some IFRS-based guidance Public sector specific IPSAS a 0 2 4 6 8 10 12 14 16 18 20 22 24 Number of IPSAS Degree Relevant IFRS Changes Adressed IPSAS based on superseded IFRS: e new IFRS not yet considered IPSAS based on superseded IFRS: new d IFRS being considered in current project IPSAS based on current IFRS, but relevant IFRS c changes not yet considered: no active project IPSAS based on current IFRS: relevant IFRS b changes being considered in current project IPSAS based on current IFRS: relevant a IFRS changes addressed 0 2 4 6 8 10 12 14 16 18 20 22 24 Number of IPSAS Prepared by: João Fonseca (May 2021) Page 1 of 20 IPSAS–IFRS Alignment Dashboard IPSASB Meeting (June 2021) CONTENTS Current IPSAS-IFRS Alignment Overview ........................................................................................................................................................................................... 1 New and revised IFRS, IFRIC and PS ................................................................................................................................................................................................. 2 Table 1 – IPSAS/RPG and Equivalent IFRS/PS—Summary ............................................................................................................................................................... 3 Table 2 – IFRS/PS with no Equivalent IPSAS/RPG ............................................................................................................................................................................ 4 Table 3 – IPSAS and Equivalent IFRS—Detail .................................................................................................................................................................................... 5 Table 4 – RPG and Equivalent PS—Detail ........................................................................................................................................................................................ 19 Table 5 – Summary of IASB Work Plan as at May 25, 2021 ............................................................................................................................................................. 20 New and revised relevant IFRS, IFRIC and PS • May 2021 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) • March 2021 – Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16) 1 The term ‘alignment’ refers to the formal processes the IPSASB follows to assess the applicability of IFRS and/or GFS requirements when developing pronouncements which faithfully represent the economic substance of transactions in the public sector. Through these processes the IPSASB aims to reduce unnecessary differences with these sources of guidance when they can also be applied in the public sector context. 2 Staff assessment Key: IPSAS = International Public Sector Accounting Standard; RPG = Recommended Practice Guideline; IFRIC = International Financial Reporting Interpretation Committee; IFRS = International Financial Reporting Standard; IAS = International Accounting Standard; PS = Practice Statement Page 2 of 20 IPSAS–IFRS Alignment Dashboard IPSASB Meeting (June 2021) Table 1 – IPSAS/RPG and Equivalent IFRS/PS—Summary IPSAS/RPG IFRS/PS Status IPSAS/RPG IFRS/PS Status IPSAS/RPG IFRS/PS Status 1, Presentation of Financial 36, Investments in Associates and IAS 1 20, Related Party Disclosures IAS 24 IAS 28 Statements Joint Ventures 21, Impairment of Non-Cash- 2, Cash Flow Statements IAS 7 IAS 36 37, Joint Arrangements IFRS 11 Generating Assets 3, Accounting Policies, Changes 22, Disclosure of Financial 38, Disclosure of Interests in Other in Accounting Estimates and IAS 8 Information about the General − IFRS 12 Entities Errors Government Sector 4, The Effects of Changes in 23, Revenue from Non-Exchange IAS 21 − 39, Employee Benefits IAS 19 Foreign Exchange Rates Transactions (Taxes and Transfers) 24, Presentation of Budget 5, Borrowing Costs IAS 23 − 40, Public Sector Combinations IFRS 3 Information in Financial Statements 9, Revenue from Exchange 26, Impairment of Cash-Generating IFRS 9, IAS 18 IAS 36 41, Financial Instruments Transactions Assets IFRIC 16 10, Financial Reporting in IAS 29 27, Agriculture IAS 41 42, Social Benefits − Hyperinflationary Economies 28, Financial Instruments: IAS 32, 11, Construction Contracts IAS 11 Presentation IFRIC 2 29, Financial Instruments: IAS 39, Financial Reporting under the Cash 12, Inventories IAS 2 − Recognition and Measurement IFRIC 16 Basis of Accounting 30, Financial Instruments: 13, Leases IAS 17 IFRS 7 Disclosures 14, Events after the Reporting IAS 38, RPG 1, Reporting on the Long-Term IAS 10 31, Intangible Assets − Date Sustainability of an Entity’s Finances SIC 32 PS 1 32, Service Concession IFRIC 12, SIC RPG 2, Financial Statement 16, Investment Property IAS 40 Management Arrangements: Grantor 29 Discussion and Analysis Commentary 17, Property, Plant, and 33, First-time Adoption of Accrual RPG 3, Reporting Service IAS 16 IFRS 1 − Equipment Basis IPSASs Performance Information 18, Segment Reporting IAS 14 34, Separate Financial Statements IAS 27 19, Provisions, Contingent 35, Consolidated Financial IAS 37 IFRS 10 Liabilities and Contingent Assets Statements Note: The IPSASB views the Cash Basis IPSAS as an important steppingstone on the journey to full accrual accounting rather than an end in itself. Page 3 of 20 IPSAS–IFRS Alignment Dashboard IPSASB Meeting (June 2021) Table 2 – IFRS/PS with no Equivalent IPSAS/RPG1 2 IFRS Status Comments IFRS (IAS) / PS Status Comments Entities reporting on IPSAS basis Entities reporting on IPSAS basis IFRS 2 Share-based Payment generally do not give share-based IAS 12 Income Taxes generally do not pay income taxes. payment compensation. IPSASB Non-current Assets Held for IAS 20 Accounting for Government IFRS 5 Non-current Assets Held for Sale and Being considered through IPSASB Sale and Discontinued Operations Grants and Disclosure of Government Discontinued Operations Revenue project. project Assistance IFRS 6 Exploration for and Evaluation of IAS 26 Accounting and Reporting by IPSASB Accounting and Reporting IPSASB Natural Resources project Mineral Resources Retirement Benefit Plans by Retirement Benefit Plans project The IPSASB may consider IFRS 8 as Public sector entities generally do IFRS 8 Operating Segments staff and IPSASB resources become IAS 33 Earnings per Share not issue equity. available. Limited interest given current IFRS 13 Fair Value Measurement IPSASB Measurement project IAS 34 Interim Financial Reporting priority to get governments onto accrual-based end year reporting. The IPSASB has yet to consider Monitoring development of ongoing Practice Statement 2: Making Materiality this Practice Statement. IPSASB IFRS 14 Regulatory Deferral Accounts IASB project Rate-regulated Activities. Judgements staff issued a Questions and Answers on Materiality. Differential reporting is one of the academic research projects agreed in the 2019-2023 Strategy and IFRS 15 Revenue from Contracts with Work Plan and remains a project IPSASB Revenue project IFRS for SMEs Customers on the list of potential projects that will be considered by the IPSASB in the mid-period work program consultation. IFRS 16 Leases IPSASB Leases project Option to use IFRS 17 directly IFRS 17 Insurance Contracts included in IPSAS 42, Social Benefits. 1 Staff assessment 2 Consequential amendments from IFRS with purple and white legend will only be considered if the IPSASB undertakes the project. Alignment Status: Being addressed in an active project. Possible project for consideration in conjunction with an active project. Not in current IPSASB work plan. Not relevant to the entities reporting on IPSAS basis. Page 4 of 20 IPSAS–IFRS Alignment Dashboard IPSASB Meeting (June 2021) Table 3 – IPSAS and Equivalent IFRS—Detail IPSAS IFRS Status Main Public Sector Differences Relevant IFRS Amendments not yet Considered Presentation of Financial Statements IPSAS 1 IAS 1 • IPSAS 1 requires the presentation of a statement showing all changes in Active Alignment Project (Revised (Revised net assets/equity. Consequential amendments from IFRS 13 Fair Value Measurement, IFRS December December • IPSAS 1 does not explicitly preclude the presentation of items of revenue 15 Revenue from Contracts with Customers, and IFRS 16 Leases. 2006) 2003) and expense as extraordinary items, either on the face of the statement of Improvements to IPSAS, 2021: financial performance or in the notes. January 2020 – Classification of Liabilities as Current or Non-current • IPSAS 1 uses different terminology. (Amendments to IAS 1) During the development of the Conceptual Framework the IPSASB decided July 2020 - Classification of Liabilities as Current or Non-current—Deferral not to include “other resources” and “other obligations” as elements of of Effective Date (Amendment to IAS 1) financial statements (see paragraphs BC5.48–BC5.56 of the Conceptual Limited Scope Review of the Conceptual Framework: Framework). Therefore, transactions where the IASB uses the