The International Public Sector Accounting Standards
The International Public Sector Accounting Standards (IPSAS) are set of accounting standards developed by the IPSAS Board for use by Public Sector enterprises around the world in the preparation, presentation and disclosure of general purpose financial statements.
The IPSAS trace their roots from the International Financial Reporting Standards (IFRS), while the IPSAS are customized for the Public Sector to satisfy requirements of public sector financial operations and reporting.
The standards apply to all Public Sector entities other than Government Business Enterprise (GBS) set up for commercial reasons.
Its principal objective is to increase the quality of general purpose financial reporting by Public Sector companies, leading to better informed assessments of the resource allocation decisions made by governments, hence promoting openness and accountability.
The International Public Sector Accounting Standards setting body the IPSAS Board (IPSASB) was founded by the International Federation of Accountants, (IFAC) the global association for the accountancy profession.
The IPSAS Board has so far released 42 Standards with over 100 nations across the globe adopting IPSAS. More than 15 nations in Africa are in various phases of implementing IPSAS.
International Bodies, such as, UN, African Union and Organization of America States have accepted IPSAS.
Benefits of IPSAS include:
Improve transparency by offering entire perspective of government activities and performance.
High level of accountability by guaranteeing accurate recording of government performance and status.
Greater credibility as governments employ similar accounting standard.
More effective monitoring of the existence and value of assets and liabilities through good asset and liability management.
Better matching of cost to revenue includes accounting for depreciation of assets.
Support better decision making by leveraging excellent information.
Harmonization of reports and statements among nations.
Better comparability of financial statements among countries.