Ken Warren Publishes Article Indicating the Future of IPSAS
In his bid to offer an understanding into International Public Sector Accounting Standards future, Ken Warren, International Public Sector Accounting Standards Board member has published a detailed article on the NZICA’s website. The article focuses on the differences in concepts between IPSAS and IFRS as well as the developments in the accounting of public sector companies.
Warren’s articles points towards the concept related differences that exist between the IPSASB and IASB owing to the dissimilarities between the public sector companies and private organizations.
Warren has pointed out in his article the manner in which the broad group of public sector statements users expands beyond the focal point of IASB’s structure on making decision on allocation of resources by providers of capital.
According to Warren this results in the likelihood of issues like stronger emphasis on ‘flows’ instead of ‘stocks’ in finance related reporting, focus on forecasts/budget and sustainability on a long term basis, a shift to service financial reporting and guide to public sector related matters like regulated and controlled assets and revenues pertaining to non-exchange.
But Warren has also clarified in his article that when public sector related matters don’t come up then International Accounting Standards Board’s requirements could be utilized.
Warren stated that if the important characters have been identified then there is absolutely no requirement that the International Public Sector Accounting Standards Board amends the International Accounting Standards Board’s requirements pertaining to a specific topic. The utilization of the IASB’s approach during such situations will not only provide it with more time to lay emphasis on some of the crucial expectations related to its constituents but it will also provide some positive advantages related to reduction of cost and understandability if same types of events as well as transactions have same kind of recognition and measurement requirements in IFRS and IPSAS.
The direction that IPSAS adopts in future will be crucial for New Zealand as the country’s evolving financial reporting structure proposes to utilize IPSAS as the very base for formulating public segment accounting related standards. The exposure related drafts that proposes the implementation of IPSAS related needs were issued in the month of June and are going to be available for the purpose of consultation till the mid of December 2012.
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