Question

What are the Challenges in adopting IPSAS either under accrual or cash basis.

Answer 1

The International Public Sector Accounting Standards Board (IPSASB) issues accounting standards and other guidance relating to the financial reporting needs of regional, national and local governments, governmental agencies, and the constituencies they serve. The International Public Sector Accounting Standards (IPSASs) and Recommended Practice Guides (RPGs) issued by the IPSASB represent a comprehensive set of authoritative international financial reporting standards and guidance for governments and other public sector entities. IPSASs aim to improve the quality of general purpose financial reporting by public sector entities, leading to better informed assessments of the resource allocation decisions made by governments, thereby increasing transparency and accountability.

IPSAS accounting and disclosure requirements will be explained in simple, clear language and illustrated with model financial statements and real-world examples. Application of the various standards is illustrated through the use of short case studies. Participant are also given an overview of the status of IPSASB’s current Work Plan, including Exposure Drafts and Consultation Papers.

In addition to a review of current accrual basis IPSAS requirements, the specialist instructors will also provide guidance on transitioning to the accrual basis of accounting for public sector bodies, and on the specifics of IPSAS implementation.

The International Public Sector Accounting Standards (IPSAS) are developed by the IPSAS Board (IPSASB), a non-UN entity. According to their publications, "The objective of the IPSASB is to serve the public interest by developing high-quality accounting standards and other publications for use by public sector entities around the world in the preparation of general purpose financial reports" (emphasis added).

The General Assembly decided "to approve the adoption by the United Nations of the International Public Sector Accounting Standards" in resolution 60/283, section IV, of 7 July 2006.

IPSAS is gradually replacing the UN System Accounting Standards (UNSAS). Some UN programmes, funds and agencies have already implemented IPSAS in their financial reporting; others are moving to IPSAS as systems are developed to enable IPSAS-compliant accounting and reporting. With the adoption of IPSAS, the United Nations will move to full accrual accounting.

Umoja is the UN's enterprise resource planning system that will, among other things, provide the information technology systems to support IPSAS-compliant accounting and reporting. Umoja will replace several other systems.

The UN System Accounting Standards were developed by the UN Secretary-General and the executive heads of the UN organizations and programmes, as called for by various General Assembly decisions and resolutions, including resolution 47/211 of 23 December 1992. The text of the proposed UN System Accounting Standards is found in Annex IV of the Report of the 79th session of the Consultative Committee on Administrative Questions (Financial and Budgetary Questions), ACC/1993/23. The implementation of the UNSAS  began in 1993.

The financial statements have been prepared on the basis of historical cost, unless stated otherwise. The

cash flow statement is prepared using the direct method. The financial statements are prepared on

accrual basis.