| Proposed Improvements to IPSAS, 2021 |
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The IPSASB issued proposed amendments to IPSAS for comment. These amendments were proposed to maintain alignment with the International Financial Reporting Standards on which IPSAS are based.
The IPSASB proposed a range of amendments to the IPSAS. The most significant amendments are as follows: - Classification of liabilities as current or non-current – Guidance was added in IPSAS 1 on Presentation of Financial Statements to explain how rights to defer liabilities affect their classification as current or non-current. If the right exists at the reporting date, the classification of liabilities is based on the existence of the right to defer settlement regardless of the entity’s intention to exercise its right.
- Onerous contracts - Onerous contracts are contracts where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits or service potential expected to be received under it, which includes amounts recoverable. IPSAS 19 on Provisions, Contingent Liabilities and Contingent Assets has been updated to explain how to calculate the “unavoidable costs”.
- Selling items produced from an asset before intended use – IPSAS 17 on Property, Plant and Equipment was amended to explain how to treat the proceeds received from items that are produced from property, plant and equipment that is not yet ready for its intended use.
- Benchmark interest rate reform – The relevant IPSAS on financial instruments have been updated to explain how changes in interest rates affect various assessments related to the classification and measurement of financial instruments.
Have your say…
The proposed amendments can be accessed on our website by following this link. The comment deadline locally is 20 September 2021. The ASB will host a roundtable discussion on the 16th of September 2021 - join us and share your comments.
The ASB will undertake its own Improvements Project in 2022/23, and it is possible that some of the amendments being discussed will also need to be made to Standards of GRAP. Any feedback received on the changes proposed by the IPSASB will be helpful when proposing similar changes to Standards of GRAP. |
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