IPSAS are the International Public Sector Accounting Standards, issued by the International Public Sector Accounting Standards Board (IPSASB) under the auspices of the International Federation of Accountants (IFAC), for use by public sector entities that deliver services to the public and do not have a primary objective to make profits.
Who Issues IPSAS?
The text states that "the IPSASB serves the public interest by developing and issuing, under its own authority, accounting and sustainability reporting standards and other publications for use by public sector entities" as described in paragraph 10 of the same document. In other words, the IPSASB is the independent body authorized to issue these standards, not any particular national government.
What Is the IPSASB's Objective in Issuing These Standards?
The text states that "the objective of the IPSASB is to serve the public interest by developing high-quality standards and other guidance for use by public sector entities around the world in the preparation of general purpose financial reports." In other words, the purpose is to improve the quality and transparency of government financial reporting to support accountability and decision-making, by providing better information for public financial management and for decision-makers.
What Else Does the IPSASB Issue Besides IPSAS Accounting Standards?
According to the text, the IPSASB develops and issues several types of publications, including "IPSAS Accounting Standards as the standards to be applied in the preparation of general purpose financial reports of public sector entities," in addition to IPSASB SRS Standards on sustainability reporting, Recommended Practice Guidelines (RPG), and other studies and research. This variety of publications shows that the term "IPSAS" is not limited to the numbered accounting standards (IPSAS 1 onward); it is a broader umbrella for a set of tools the Board issues to serve preparers and users of government financial reports.
On What Accounting Basis Do IPSAS Apply?
The text draws a clear distinction between the two types of standards regarding accounting basis, stating that "the IPSASB develops IPSAS Accounting Standards which apply to the accrual basis of accounting and IPSASB SRS Standards which apply to sustainability-related information in general purpose financial reports." The numbered IPSAS (IPSAS 1 onward) are specifically built on the accrual basis of accounting.
Which Entities Do IPSAS Apply To?
The text sets out three criteria that must all be met for the Standards to apply to a given entity: "the Standards are designed to apply to public sector entities that meet all the following criteria: (a) Are responsible for the delivery of services to benefit the public and/or to redistribute income and wealth; (b) Mainly finance their activities, directly or indirectly, by means of taxes and/or transfers from other levels of government, social contributions, debt or fees; and (c) Do not have a primary objective to make profits." The text also states that "the Standards are not meant to apply to immaterial items," meaning their application is always subject to materiality.
Legal References
- IPSASB — Preface To IPSAS Accounting Standards And IPSASb SRS Standards, paragraphs 3, 5, 7, 8, 10, 11
For questions about your specific situation, you can ask the Public Sector Accounting Helper on Helpers, or consult a licensed chartered accountant.