Preliminary Preface for the Public Sector Published by IPSASB

Wednesday, August 14, 2013 Print Email

A preliminary version of a preface has been released by the International Public sector accounting standards board (IP SA SB). It consists of a conceptual framework for the public sector. The preface highlights the characteristics of the public sector for the development of International Public sector Accounting standards (IPSAS) and recommended practice guidelines.

Preliminary Board view is the title given to the document. This identifies the primary objects of the public sectors. These public sectors generate return on equity to investors and deliver services to the public instead of making profits.

The preface highlighted many of the public sector entities which are discussed below in a precise manner.

- The final significance of non-exchange transactions was discussed. This includes involuntary transfers such as collection of taxation and increasing importance of accountability.

- The importance of information to compare actual spending and the approved budget was discussed with the resulting surplus with budget estimates.

- The assets in the Public sector will provide service instead of creating cash flows. These assets will represent areas of natural significance. They contribute to the historical and cultural character of a nation.

- The nature of public sector programs make going concern concept difficult to explain in the public sector context. This results in an increase need for information about the long term sustainability.

- The role of public sector entities should be regular including entities operating in different sectors.

- The difference between general purpose financial statements and government finance statistics were discussed along with commonalities.

The earlier draft which was issued in April 2011 was not approved by IPSASB until it finalizes its conceptual framework in 2014. IPSASB considers the publication of preliminary preface important. It is because the importance of characteristics identified to the future development of IPSASs and RPGs.

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