Table Of ContentIPSAS Explained
Second Edition
IPSAS Explained
A Summary of International Public
Sector Accounting Standards
Second Edition
Thomas Müller–Marqués Berger
Ernst & Young
This edition first published by John Wiley & Sons Ltd in 2012
© 2012 EYGM Limited.
Registered office
John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ,
United Kingdom
For details of our global editorial offices, for customer services and for information about how
to apply for permission to reuse the copyright material in this book please see our website at
http://www.wiley.com/go/permissions.
The right of the author to be identified as the author of this work has been asserted
in accordance with the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system,
or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording
or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without
the prior permission of the publisher.
Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some
material included with standard print versions of this book may not be included in e-books
or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in
the version you purchased, you may download this material at http://booksupport.wiley.com.
For more information about Wiley products, visit www.wiley.com.
Designations used by companies to distinguish their products are often claimed as trademarks.
All brand names and product names used in this book are trade names, service marks,
trademarks or registered trademarks of their respective owners. The publisher is not
associated with any product or vendor mentioned in this book. This publication is designed
to provide accurate and authoritative information in regard to the subject matter covered.
It is sold on the understanding that the publisher is not engaged in rendering professional
services. If professional advice or other expert assistance is required, the services
of a competent professional should be sought.
A catalogue record for this book is available from the British Library.
ISBN 978–1–118–36871–8 (hardback)
ISBN 978–1–118–40012–8 (ebook)
ISBN 978–1–118–40013–5 (ebook)
ISBN 978–1–118–40014–2 (ebook)
Set in 9 pt EY Interstate Light by Ernst & Young GmbH.
Printed in Great Britain by TJ International Ltd, Padstow, Cornwall.
Ernst & Young
V
Ernst & Young
Assurance | Tax | Transactions | Advisory
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory
services. Worldwide, our 152,000 people are united by our shared values
and an unwavering commitment to quality. We make a difference by helping
our people, our clients and our wider communities achieve their potential.
Ernst & Young refers to the global organization of member firms of
Ernst & Young Global Limited, each of which is a separate legal entity.
Ernst & Young Global Limited, a UK company limited by guarantee, does
not provide services to clients. For more information about our organization,
please visit ww.ey.com.
How Ernst & Young's Global Government & Public Sector Center can help
your organization
Around the world, governments and not-for-profi t organizations are
continually seeking innovative answers to complex challenges. They are
striving to provide better services at lower costs and to ensure sustainable
economic development, a safe environment, more transparency and increased
accountability. Ernst & Young combines private sector leading practices with
an understanding of the public sector’s diverse needs, focusing on building
organizations’ capability to deliver improved public services. Drawing on many
years of experience, we can work with you to help strengthen your
organization, deliver value for money and achieve lasting improvement. Our
Global Government & Public Sector Center brings together teams of highly
skilled professionals from our assurance, tax, transaction and advisory
services. We are inspired by a deep commitment to help you meet your goals,
achieve your potential and enhance public value, today and tomorrow.
© 2012 EYGM Limited.
All Rights Reserved.
EYG no. FK0022
This publication contains information in summary form and is therefore intended
for general guidance only. It is not intended to be a substitute for detailed
research or the exercise of professional judgment. Neither EYGM Limited nor any
other member of the global Ernst & Young organization can accept any
responsibility for loss occasioned to any person acting or refraining from action as
a result of any material in this publication. On any specific matter, reference
should be made to the appropriate advisor.
ED None
Ernst & Young
VII
Foreword
In many countries all over the world, public sector accounting is in a phase
of transition to resource–oriented, accrual–based accounting and reporting.
Both nationally and internationally, however, considerable differences between
the accounting systems and the published financial statements can be identified.
Accordingly, public sector accounting is highly diversified, in formal respects and
also with regard to the content. These developments are moving away from the key
objectives of public management, which include reducing bureaucracy, achieving
comparable standards in terms of accountability and transparency. Debates in
recent years and developments in France, New Zealand, South Africa or Switzerland,
for example, have shown that the International Public Sector Accounting Standards
(IPSASs) could be a suitable means of harmonizing and aligning public sector
accounting.
As a global organization with a strong focus on the public sector, Ernst & Young
has therefore set about offering a contribution to the further development and
harmonization of public sector accounting. We are convinced that the global use
of IPSASs will enhance transparency and accountability — both of them urgently
needed to overcome the current crisis of government’s finances. The aim of the
Second edition of this publication is still to provide decision-makers in the public
sector with an overview of the IPSASs and the activities of the International Public
Sector Accounting Standards Board (IPSASB). Each IPSAS is presented in brief
in the following, focusing on the core content of the relevant standard. In the
interest of readability, we decided in most cases not to look at the — often extensive
— disclosures in the notes required by the IPSASs.
This book is based on the IPSASs and Exposure Drafts (EDs) as at 1 January 2012.
New standards like the ones on financial instruments, intangible assets or service
concession arrangements are incorporated in this new edition of IPSAS Explained.
Furthermore, the current sovereign debt crisis led us to analyze these developments
and discuss the implications for public sector financial management. And finally, we
have added more graphs, figures and tables which will help the readers to get a
better understanding of the sometimes complex and inapprehensible standards.
If you have any comments or suggestions, we would be happy to consider them
for a third edition of this publication. Please send an e-mail to thomas.mueller-
