The International Public Sector Accounting Standards Board (IPSASB) published amendments to RPG 1 on Reporting on the Long-term Sustainability of an Entity’s Finances and RPG 3 on Reporting Service Performance Information for comment. In the Exposure Draft (ED), the IPSASB provided additional non-authoritative guidance to facilitate the reporting of sustainability program information.

Our main concerns and proposals on the ED are:

Urgency of the amendments
The amendments proposed in the ED are premature as the IPSASB is yet to consider the development of sustainability reporting standards. It is  also difficult to understand why the amendments are viewed as urgent as they are minor and non-authoritative. The IPSASB does not explain in the ED why the amendments are urgent.

Positioning amendments in the broader IPSASB project on sustainability
The IPSASB decided in December 2022 to progress with work on sustainability reporting in the public sector. As work in this area is yet to commence, it is unclear how and/or whether there will be a link between the sustainability reporting standards that will be developed, RPG 1 and RPG 3. The IPSASB should explain whether and/or how it sees these pronouncements working together and whether the outcome will be cohesive and understandable. It would be useful if the IPSASB provides stakeholders with an understanding of the holistic approach of the IPSASB’s intention with respect to sustainability reporting.

Meeting the interim needs of users
There are several IPSASs and RPGs that can be useful for reporting aspects of sustainability – both within the financial statements and in reports that accompany the financial statements. Examples include IPSAS 24 on Presentation of Budget Information in Financial Statements, IPSAS 1 on Presentation of Financial Statements, IPSAS 19 on Provisions, Contingent Liabilities and Contingent Assets, and all the Recommended Practice Guidelines (including RPG 2 on Financial Statement Discussion and Analysis).

As there are broader application issues that could be considered across the suite of IPSAS, a standard setting solution may not be the most optimal way of communicating how IPSASs can be used to report various aspects of sustainability reporting. A staff document that explains more broadly how the IPSASs and the RPGs can be applied to report on sustainability related issues could be more helpful than making narrow scope amendments to the RPGs.

Our specific comments on the proposals in the ED are outlined in the comment letter. Access the full comment letter here.