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IPSASB ISSUES EXPOSURE DRAFT 46―RECOMMENDED PRACTICE GUIDELINE, Reporting on the Long-Term Sustainability of a Public Sector Entity’s Finances
(New York/October 19, 2011) −The International Public Sector Accounting Standards Board (IPSASB) has published Exposure Draft (ED) 46, Recommended Practice Guideline. This ED builds on a consultation paper issued in late 2009. ED 46 provides good practice guidelines on reporting on the long-term fiscal sustainability of a public sector entity, and particularly emphasizes that entities may be able to draw on projections that are already being made by other bodies, thereby ensuring a cost-effective approach.
The sovereign debt crisis has emphasized the significance of the fiscal condition of governments and other public sector entities to the global economy. There have been heightened concerns about the ability of governments to meet debt servicing obligations and the extent to which they can maintain current policies and meet current and future obligations related to entitlement programs, without raising taxes and contributions or increasing debt to unsustainable levels.
These concerns have emphasized the importance of providing projections of inflows and outflows of resources over the longer term, together with narrative explanations of the main risks facing governments and other public sector entities. This information allows the users of general purpose financial reports to assess the extent to which current policies are sustainable, and complements the financial statements, which remain at the core of public sector financial reporting.
“The continuing volatility in the world’s financial markets has reinforced the IPSASB’s conviction that financial statements alone cannot provide all the information necessary to enable citizens, investors, and other users to evaluate the long-term fiscal sustainability of governments and public sector entities,” explained Andreas Bergmann, chair of the IPSASB. “ED 46 aims to provide straightforward guidance to entities to ensure that information on their fiscal sustainability is complete, relevant, and understandable. I encourage our constituents to give this ED full consideration, provide feedback, and assess the need to report on the long-term sustainability of their finances.”
This IPSASB project has continued to benefit greatly from the oversight of a Task Force with a wide membership, including standard setters with experience reporting on long-term fiscal sustainability, governments that have many years’ experience reporting on long-term fiscal sustainability, and supranational organizations, such as the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), and Eurostat, the statistical office of the European Union.
ED 46 is available to download free of charge from the IFAC website (www.ipsasb.org). The IPSASB encourages IFAC members, associates, and regional accountancy bodies to promote the availability of this Exposure Draft to their members and employees.
About the IPSASB
The IPSASB develops accounting standards and guidance for use by public sector entities. The structures and processes that support the operations of the IPSASB are facilitated by IFAC.
The IPSASB develops accounting standards and guidance for use by public sector entities. The structures and processes that support the operations of the IPSASB are facilitated by IFAC.
About IFACIFAC is the global organization for the accountancy profession, dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.
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