Question

IPSAS 1 deals with the Presentation of Financial Statements for the public sector, and was drawn from International Accounting Standard (IAS 1) which speaks to the Presentation of Financial Statements for Commercial Accounting purposes. Under IPSAS 1 the objectives of general purpose financial reporting in the public sector should be to provide information useful for decision making, and to demonstrate the accountability of the entity for the resources entrusted to it.

a. What are the 5 specific objectives of information that general purpose financial statements provide to the public sector entity that allow it to demonstrate accountability of these entrusted resources?   

b. IPSAS 1 also speaks to the “Components of Financial Statements”. A complete set of financial statements comprises of 6 statements, name these statements?

Answer 1

Solution :-

a. 1. Providing information about the sources, allocation and uses of financial resources.

2. Providing information about how the entity financed its activities and met its cash requirements.

3. Providing information that is useful in evaluating the entire ability to finance its activities and to meet its liability and commitments.

4. Providing information about the financial condition of the entity and changes in it.

5. Providing aggregate information useful in evaluating the entity's performance in terms of service, costs, efficiency and accomplishments.