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What are the IPSAS?

The International Public Sector Accounting Standards (IPSAS) are a set of currently (February 2015) 38 accrual-based standards and one comprehensive cash-based standard on accounting for public sector entities (see also: IPSAS: The standards). The Standards are developed and published by the so-called "International Public Sector Accounting Standards Board" (IPSASB or IPSAS-Board). The IPSAS aim to improve the quality and transparency of public sector financial reporting as well to enhance governments' financial management capabilites. So far, several countries (e.g. Switzerland, Austria, Netherlands, France) and international organisations (e.g. European Commission, NATO, OECD, UN) have already fully or partly adopted IPSAS or plan to do so.

All standards are principally published in English. In terms of content, most IPSAS have a corresponding International Accounting Standards (IAS)/International Financial Reporting Standard (IFRS) on which they are based. These IAS/IFRS are primarily designed for enterprises - and not for public sector entities - which is why the IAS/IFRS were adjusted to public sector characteristics. IPSAS are designed to be used by public sector entities (e.g. state government, municipal government). However, they should not be applied by government business enterprises (GBE). GBEs are supposed to apply IAS/IFRS.

One major problem of the International Public Sector Accounting Standards is that they primarily focus on accounting, i.e. ex-post financial reporting. A true modernisation of public financial management, however, requires the implementation of accrual-based accounting as well as accrual-based budgeting. In the public sector, the annual budget is one of the most (if not the most) important financial governance instrument(s). Hence, reforming public sector budgeting is absolutely essential for modernising public financial management. The IPSAS can function as a suitable basis for reforming and harmonising public sector accounting. Yet for the purposes of reforming and harmonising public sector budgeting, new public sector budgeting standards need to be developed (e.g. also inspired by existing national budgetary laws that are already based on accrual principles).

What is the IPSASB?

The IPSASB is an independent standard-setting board that is supported by the International Federation of Accountants (IFAC). The IFAC is a global institution for the accountancy profession. Both the IPSASB and the IFAC pursue the objective of serving the public interest.

The IPSASB consists of 18 voluntary members which are appointed by the IFAC-Board based on recommendations from the IFAC Nominating Committee. Members represent various areas of professional accounting expertise including ministries of finance, government audit institutions, and academia.

The IPSASB's website: http://www.ipsasb.org/

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