IPSAS 1
Active
Presentation of Financial Statements
Prescribes the basis for presenting general purpose financial statements prepared under the accrual basis by public sector entities, covering structure, minimum content, fair presentation, the complete set of statements, going concern, current/non-current classification, comparative information, and related disclosures.
Active Standard
IPSAS 1 is the current, active Presentation of Financial Statements standard issued by the IPSASB. It is effective for annual financial statements covering periods beginning on or after 1 January 2008 (earlier application encouraged). The 2000 version was superseded by the current standard (para. 155, Withdrawal); first-time-adoption transitional relief formerly carried directly by IPSAS 1 now resides in IPSAS 33.
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Objective & Scope
Objective – why IPSAS 1 exists
To prescribe the manner in which general purpose financial statements should be presented, to ensure comparability both with the entity's own financial statements of previous periods and with the financial statements of other entities. It sets overall considerations for presentation, guidance for structure, and minimum content requirements for financial statements prepared under the accrual basis.
WHAT IPSAS 1 DOES NOT COVER
Recognition, measurement, or disclosure of specific transactions and events – governed by the relevant topic Standard (e.g. IPSAS 45, IPSAS 12), not IPSAS 1
IPSAS 1 is almost entirely a presentation standard, paras. 1–155, all of equal authority – read together with the Preface to IPSAS and the Conceptual Framework.
Scope – who applies it, and to what
APPLIES TO
All general purpose financial statements prepared and presented under the accrual basis of accounting in accordance with IPSAS Entities presenting consolidated financial statements (IPSAS 35) and those presenting separate financial statements (IPSAS 34) – equally Statements presented separately or within another public document (e.g. an annual report)
DOES NOT APPLY TO
Condensed interim financial information Cash-basis reporting – governed by the separate Cash Basis IPSAS
Who is a "user"? Taxpayers/ratepayers, members of the legislature, creditors, suppliers, the media, and employees – people not in a position to demand tailored reports. This is why IPSAS 1 optimises for broad comparability, not any one stakeholder's bespoke needs.
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Definitions – Core Terms (para. 7, 7A)
Key definitions you must know
Accrual basis
Transactions and events are recognized when they OCCUR – not only when cash or its equivalent is received or paid. Elements recognized: assets, liabilities, net assets/equity, revenue, expenses.
Assets
Resources controlled by an entity as a result of past events, from which future economic benefits or service potential are expected to flow to the entity.
Liabilities
Present obligations arising from past events, the settlement of which is expected to result in an outflow of resources embodying economic benefits or service potential.
Net assets/equity
The residual interest in the assets of the entity after deducting all its liabilities – may be positive or negative. Components: contributed capital, accumulated surpluses/deficits, reserves, non-controlling interests.
More core definitions
Revenue
Gross inflow of economic benefits or service potential during the reporting period, when it increases net assets/equity, other than increases relating to contributions from owners.
Expenses
Decreases in economic benefits or service potential in the form of outflows/consumption of assets or incurrence of liabilities, that decrease net assets/equity – other than distributions to owners.
Contributions / distributions to owners
Future economic benefits or service potential contributed BY, or distributed TO, owners in their capacity as owners – establishing or realising a financial interest in net assets/equity.
Impracticable
A requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so.
Terms imported from IPSAS 28 (para. 7A) & the full "Notes" definition
PUTTABLE INSTRUMENTS (IPSAS 28)
A puttable financial instrument that IPSAS 28 nonetheless permits to be classified as an equity instrument, subject to specified conditions An instrument obliging the entity to deliver a pro rata share of net assets to another party ONLY ON LIQUIDATION, also classified as equity under IPSAS 28
NOTES
Information additional to that presented in the SOFP, Statement of Financial Performance, Statement of Changes in Net Assets/Equity, and Cash Flow Statement – narrative descriptions, disaggregations, and information about items not qualifying for recognition.
Terms defined in other IPSAS carry the same meaning here, and are reproduced in the IPSASB's separately published Glossary of Defined Terms. See section 22 for the complete Quick-Reference Glossary, including net assets/equity reserve types.
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Economic Entity (paras. 8–14)
What "economic entity" means
A controlling entity and its controlled entities, used for financial reporting purposes. Other terms sometimes used: administrative entity, financial entity, consolidated entity, group.
Worked illustration
A government housing department may be an economic entity that includes controlled entities providing housing at a nominal charge (social policy objective) alongside controlled entities providing accommodation on a commercial basis.
Both sit inside the same economic entity for consolidation purposes – social and commercial objectives can coexist within one reporting group.
4.1–4.4 – the explanatory cluster following the core definitions
4.1 Future economic benefits or service potential
Service potential = assets used to deliver goods/services per the entity's objectives without directly generating net cash inflows (e.g. a school, a road). Future economic benefits = assets used to generate net cash inflows. IPSAS 1 uses the composite phrase to capture both.
4.2 Government Business Enterprises
[Deleted] – para. 12 and the related definition were removed by The Applicability of IPSAS (Apr 2016). "GBE" no longer has a defined role in IPSAS 1.
4.3 Materiality
Users are assumed to have reasonable knowledge of the public sector, economic activities, and accounting, and a willingness to study information with reasonable diligence – the materiality test is framed around that user.
4.4 Net assets/equity
Net Assets/Equity = Assets − Liabilities
The residual measure on the SOFP – may be positive or negative. Other terms (e.g. "equity", "taxpayers' equity") may be substituted provided the meaning is clear.
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Purpose & Responsibility for Financial Statements (paras. 15–20)
Purpose – accountability + decision-usefulness
Financial statements are a structured representation of financial position and performance. In the public sector, general purpose financial reporting exists to inform decisions AND demonstrate accountability for resources entrusted to the entity.
FIVE ACCOUNTABILITY OBJECTIVES (PARA. 15)
Sources, allocation, and uses of financial resources How the entity financed its activities and met cash requirements Ability to finance activities and meet liabilities/commitments Financial condition and changes in it Aggregate performance – service costs, efficiency, accomplishments
Financial statements also have a predictive role – indicating resources needed for continued operations, and whether resources were obtained/used per the legally adopted budget and legal/contractual limits.
Responsibility for preparation & presentation
INDIVIDUAL ENTITY LEVEL
Typically the head of the entity (permanent head/chief executive) and the head of the central finance agency (controller/accountant-general). Jurisdictions may split "prepares" from "approves/presents."
WHOLE-OF-GOVERNMENT LEVEL
Responsibility for consolidated statements usually rests jointly with the head of the central finance agency and the finance minister (or equivalent).
Financial statements are unlikely to meet every accountability objective alone, since public sector entities are typically not profit-driven – supplementary information (incl. non-financial statements) may accompany them (para. 18).
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A Complete Set of Financial Statements (paras. 21–26)
The seven required components
A statement of financial position A statement of financial performance A statement of changes in net assets/equity A cash flow statement A budget-vs-actual comparison – when the entity's approved budget is publicly available (IPSAS 24) Notes – summary of significant accounting policies plus other explanatory notes Comparative information for the preceding period (para. 53, 53A)
Alternate names in use across jurisdictions: SOFP = "balance sheet"/"statement of assets and liabilities"; statement of financial performance = "income statement"/"operating statement"/"P&L"; notes may include items called "schedules."
Budgetary accountability & encouraged extras
BUDGET COMPARISON
Mandatory (IPSAS 24) where the budget is publicly available. Otherwise IPSAS 1 encourages a columnar budget-vs-actual comparison (with an optional variance column) or a disclosure that budgeted amounts were not exceeded.
ENCOURAGED SUPPLEMENTARY REPORTING
Performance indicators & statements of service performance Program reviews and management commentary on achievements Compliance with legislative/regulatory/other externally-imposed requirements
Public sector entities are typically subject to appropriations or budget authorizations – non-compliance disclosure is relevant to accountability and may influence future resource-allocation decisions.
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Fair Presentation & Compliance with IPSAS (paras. 27–37)
The compliance package & the "extremely rare" override
Financial statements shall present fairly financial position, financial performance, and cash flows. Fair presentation = faithful representation of transactions per IPSAS definitions and recognition criteria. Applying IPSAS, with extra disclosure when necessary, is presumed to achieve fair presentation.
AN ENTITY CLAIMING COMPLIANCE MUST
Make an explicit, unreserved statement of compliance in the notes (para. 28) Comply with all requirements – no partial-compliance labelling Select/apply policies per IPSAS 3's hierarchy where no Standard specifically applies Provide extra disclosure whenever specific compliance is insufficient for understanding
WHAT DOES NOT CURE A PROBLEM
Inappropriate accounting policies are not rectified by disclosure, notes, or explanatory material (para. 30)
NOT AN ESCAPE HATCH
Departures made purely to satisfy statutory/legislative reporting requirements do not qualify under para. 31 – if material, that's simply non-compliance (para. 37)
Extremely rare override (paras. 31–37): where compliance would be so misleading it conflicts with the objective of financial statements, AND the regulatory framework PERMITS departure, the entity shall depart – disclosing the fair-presentation statement, compliance-except-for statement, the departed requirement & reason, and the financial impact per period. If the framework prohibits departure, the entity instead discloses the requirement, why it misleads, and the adjustments that would have achieved fair presentation.
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Going Concern & Consistency of Presentation (paras. 38–44)
Going concern – assessed, not assumed
Management assesses the entity's ability to continue as a going concern. Statements are prepared on that basis unless there's an intention to liquidate, cease operating, or no realistic alternative. Material uncertainties casting significant doubt must be disclosed even if the going-concern conclusion still holds.
Public sector going concern is different: a government's power to levy taxes or rates may support going concern even with extended periods of negative net assets/equity. The test is primarily relevant at the individual entity level, not whole-of-government – multi-year funding agreements can support going concern even where an entity's own SOFP looks weak.
Consistency of presentation
Presentation and classification is retained period to period unless (a) a significant change in operations, or a review of the statements, shows another presentation/classification is more appropriate under IPSAS 3's criteria, or (b) an IPSAS requires the change.
A change is only made when it's faithfully representative AND more relevant, and the revised structure is likely to continue (so comparability isn't impaired). Comparatives are then reclassified under paras. 55–56.
A significant acquisition/disposal, or a structural review, is the typical trigger – e.g. disposing of a controlled entity that changes the economic entity's principal activity.
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Materiality, Aggregation & Offsetting (paras. 45–52)
Materiality & aggregation
Each material class of similar items presented separately Dissimilar items presented separately unless immaterial Immaterial line items aggregated on the face or in the notes An item immaterial for face presentation may still warrant separate note disclosure
A specific IPSAS disclosure requirement need not be satisfied if the information is immaterial (para. 47).
Offsetting – general prohibition, narrow exceptions
Assets and liabilities, and revenue and expenses, shall not be offset unless required or permitted by an IPSAS – offsetting hides users' ability to understand transactions and assess future cash flows.
NOT OFFSETTING
Measuring assets net of valuation allowances – e.g. obsolescence, doubtful debts
PERMITTED NETTING (SUBSTANCE-BASED)
Gains/losses on disposal of non-current assets Provision expenses reimbursed under contract (e.g. warranty) Gains/losses from a group of similar transactions – unless material
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Comparative Information (paras. 53–58)
Minimum comparative information (para. 53A)
1 × Statement of financial position, with comparative period 1 × Statement of financial performance, with comparative period 1 × Cash flow statement, with comparative period 1 × Statement of changes in net assets/equity, with comparative period Related notes
Comparative narrative/descriptive information is also required where relevant to understanding the current period (e.g. an unresolved legal dispute carried forward).
Reclassification of comparatives
When presentation/classification is amended, comparatives are reclassified unless impracticable.
IF RECLASSIFIED – DISCLOSE
The nature of the reclassificationThe amount of each item/class reclassifiedThe reason for the reclassification
IF IMPRACTICABLE – DISCLOSE
Why the amounts were not reclassifiedThe nature of the adjustments that would have been made
IPSAS 3 governs the adjustments to comparatives required for a change in accounting policy or correction of an error.
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Statement of Financial Position – Structure (paras. 88–98)
Minimum line items on the face (para. 88)
ASSETS
Property, plant & equipment Investment property Intangible assets Financial assets Investments (equity method) Inventories Receivables Cash and cash equivalents Assets held for sale (IPSAS 44)
LIABILITIES & NET ASSETS/EQUITY
Taxes & transfers payable Social benefits liabilities Payables Provisions Financial liabilities Liabilities in disposal groups held for sale Non-controlling interest, within net assets/equity Net assets/equity attributable to owners of controlling entity
IPSAS 1 does not prescribe order or format – para. 88 lists items sufficiently different in nature/function to warrant separate presentation. Different measurement models for asset classes (e.g. cost vs revalued PP&E under IPSAS 45) itself signals separate line presentation.
Face-or-notes subclassifications & no-share-capital disclosure
TYPICAL SUBCLASSIFICATIONS (PARA. 94)
PP&E disaggregated into classes (IPSAS 45) Receivables split: user charges, taxes/other revenue, related parties, prepayments, other Inventories per IPSAS 12: merchandise, supplies, materials, WIP, finished goods Social benefits liabilities by scheme, where material
NO SHARE CAPITAL – DISCLOSE SEPARATELY (PARA. 95)
Contributed capital (cumulative contributions less distributions) Accumulated surpluses or deficits Reserves, with nature & purpose of each Non-controlling interests
Most public sector entities lack share capital and are controlled exclusively by another public sector entity – the government's interest is a blend of contributed capital and accumulated surpluses/reserves (para. 96). A non-controlling interest can still arise, e.g. a partly-privatized commercial public sector entity within the economic entity.
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Current / Non-Current Classification (paras. 70–87C)
Current asset – any one of four tests (para. 76)
Expected to be realized, or held for sale/consumption, in the normal operating cycle Held primarily for the purpose of trading Expected to be realized within 12 months of the reporting date Is cash or a cash equivalent, unless restricted from exchange/use to settle a liability for ≥12 months
All other assets → non-current. Where the operating cycle isn't clearly identifiable, it's assumed to be 12 months – so taxes/user-charges receivable, inventories, and accrued investment revenue stay current even if realized beyond 12 months.
Current liability – any one of four tests (para. 80)
Expected to be settled in the normal operating cycle Held primarily for the purpose of trading Due to be settled within 12 months of the reporting date The entity does not have the right, at the reporting date, to defer settlement for ≥12 months
All other liabilities → non-current. A mixed presentation basis (current/non-current for some items, liquidity order for others) is permitted where an entity has diverse operations and it's more relevant (para. 74).
2023 amendment cluster – the "right to defer" tightened (paras. 83A–87C, effective 1 Jan 2026, retrospective)
Improvements to IPSAS, 2023 sharpened para. 80(d): the right to defer settlement for 12 months must have substance and must exist at the reporting date.
LOAN COVENANTS – DO THEY AFFECT THE RIGHT?
Covenant tested on or before the reporting date → affects the right (even if compliance is only assessed afterwards) Covenant tested only after the reporting date (e.g. 6 months later) → does not affect the right at the reporting date – but triggers disclosure under para. 87A
CLASSIFICATION IS UNAFFECTED BY
Management's intention or expectation to settle early Actual early settlement between the reporting date and authorization for issue (para. 86A)
Worked example – covenant breach at year end
An entity breaches a long-term loan covenant on or before the reporting date, making the liability payable on demand. The lender agrees after the reporting date (but before authorization for issue) not to demand payment.
The liability is still classified as CURRENT – at the reporting date itself, the entity lacked the right to defer settlement for 12 months. Exception: if the lender had, by the reporting date, already granted a grace period ending ≥12 months after the reporting date, the liability is non-current.
"Settlement" now has a precise meaning (paras. 87B–87C)
A transfer to the counterparty that extinguishes the liability: cash, other resources (goods/services), or the entity's own equity instruments – unless a counterparty-option conversion feature is separately classified as equity under IPSAS 28.
Non-adjusting events (para. 87, cross-ref IPSAS 14)
Refinancing a current liability on a long-term basis Rectifying a covenant breach, or receiving a grace period to do so Settlement of a liability classified as non-current
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Statement of Financial Performance (paras. 99–117)
Minimum line items on the face (para. 102)
Revenue – separately: interest revenue (effective interest method); gains/losses on derecognition of amortized-cost financial assets Finance costs Impairment losses/reversals (IPSAS 41) Share of surplus/deficit of associates & joint ventures (equity method) Gain/loss on reclassification between FV categories (IPSAS 41) Surplus or deficit Total of discontinued operations (single amount, IPSAS 44)
Also shown as allocations of surplus/deficit: amounts attributable to non-controlling interest, and to owners of the controlling entity (para. 103).
Expense analysis – two permitted methods
POLICY CHOICE – WHICHEVER IS MORE RELEVANT
By nature – e.g. employee benefits, depreciation, social benefits expense (simple; no functional allocation) By function – e.g. health, education, social benefits expense (more relevant; needs judgment-heavy allocation)
Function method carries a price: entities using the function method must additionally disclose the nature of expenses – including depreciation and amortization, social benefits expense, and employee benefits expense (para. 115) – since nature-based information is useful for predicting future cash flows.
Illustrative extract – nature of expense method
Line item20X2
RevenueX
Employee benefits costs(X)
Social benefits expenses(X)
Depreciation & amortization(X)
Other expenses(X)
SurplusX
Illustrative extract – function of expense method
Line item20X2
RevenueX
Social benefits expenses(X)
Health expenses(X)
Education expenses(X)
Other expenses(X)
SurplusX
Separate disclosure triggers (para. 107) & dividends
Inventory write-downs to NRV, or PP&E write-downs to recoverable amount, and reversals Restructurings and reversals of restructuring provisions Disposals of PP&E; privatizations or other investment disposals Discontinued operations; litigation settlements; other provision reversals
Where an entity has share capital and provides a dividend/similar distribution, it discloses the amount recognized as distributions to owners during the period, and the related amount per share – on the face of the SOFPerformance, the Statement of Changes in Net Assets/Equity, or in the notes (para. 117).
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Statement of Changes in Net Assets/Equity (paras. 118–125C)
Required content
ON THE FACE (PARA. 118)
Surplus or deficit for the period Each item of revenue/expense recognized DIRECTLY in net assets/equity, and their total Total revenue & expense for the period, split between owners and non-controlling interest Per component: effect of policy changes & error corrections (IPSAS 3)
FACE OR NOTES (PARA. 119)
Transactions with owners in their capacity as owners, distributions shown separately Full reconciliation of opening to closing carrying amount, per component, each change shown separately
Reclassification adjustments
Some amounts previously recognized directly in net assets/equity are later reclassified to surplus or deficit when a specified event occurs – e.g. disposal of a foreign operation (IPSAS 4), or specified hedged cash flows affecting surplus/deficit (IPSAS 41).
No reclassification arises for revaluation surplus (IPSAS 45) or defined-benefit-plan remeasurements (IPSAS 39) – these stay in net assets/equity permanently, though revaluation surplus may transfer to accumulated surpluses/deficits as the asset is used or derecognized (para. 125C).
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Cash Flow Statement (para. 126)
A mandatory component IPSAS 1 doesn't itself govern
Cash flow information gives users a basis to assess (a) the entity's ability to generate cash and cash equivalents, and (b) its needs to utilize those cash flows. IPSAS 1 only anchors the cash flow statement as a mandatory component of a complete set – the detailed presentation and disclosure requirements sit entirely in IPSAS 2, Cash Flow Statements.
The cash flow statement is the only primary statement not prepared under the accrual basis.
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Notes – Structure, Accounting Policies & Estimation Uncertainty (paras. 127–148)
Conventional note ordering (para. 129)
Statement of compliance with IPSAS Summary of significant accounting policies Supporting information for face items, in statement/line-item order Other disclosures – contingent liabilities (IPSAS 19), unrecognized commitments, financial risk management (IPSAS 30)
Deviating is acceptable where it aids understanding (e.g. combining fair-value-change disclosures with maturity disclosures) – but a systematic structure is retained as far as practicable.
Disclosure of accounting policies
Measurement basis/bases used (historical cost, current operational value, cost of fulfillment, fair value) Extent of transitional provisions applied under any IPSAS Other policies relevant to understanding the statements
Judgments vs. estimates – often confused: para. 137 requires disclosure of JUDGMENTS (other than estimation) with the most significant effect on recognized amounts (e.g. is an arrangement in substance a lease?). This is distinct from the estimation-uncertainty disclosures at para. 140.
Key sources of estimation uncertainty (paras. 140–148)
Where key assumptions about the future, or other key sources of estimation uncertainty, carry a significant risk of causing a material adjustment to carrying amounts within the next financial year, the entity discloses their nature and carrying amount at the reporting date.
TYPICAL TRIGGERS (PARA. 141)
Recoverable amount of certain PP&E classes Technological obsolescence effects on inventories Provisions dependent on litigation outcomes
GOOD DISCLOSURE INCLUDES (PARA. 144)
The nature of the assumption/uncertainty Sensitivity of carrying amounts, and why Expected resolution & range of reasonably possible outcomes within the next year
Carve-out: not required for assets/liabilities measured at current operational value or fair value based on a quoted price in an active market for an identical item (para. 143). Budget information/forecasts need not be disclosed to satisfy para. 140 (para. 145).
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Notes – Capital, Puttable Instruments & Other Disclosures (paras. 148A–150)
Capital management disclosures (paras. 148A–148C)
Qualitative: what it manages as capital; externally imposed capital requirements & how incorporated; how it is meeting objectives Quantitative: summary data on what it manages as capital Period-on-period changes in the above Whether it complied with externally imposed capital requirements – and consequences if not
Based on information provided internally to key management personnel. Where aggregate disclosure across multiple capital regimes would distort understanding (e.g. a conglomerate spanning insurance and banking), separate disclosure per requirement is required instead.
Puttable instruments & other disclosures
PUTTABLE INSTRUMENTS CLASSIFIED AS EQUITY (PARA. 148D)
Summary quantitative data on the amount classified within net assets/equity Objectives/policies/processes for managing the repurchase/redemption obligation Expected cash outflow on redemption, and how it was determined
OTHER DISCLOSURES (PARAS. 149–150)
Dividends proposed/declared before authorization but not recognized, plus amount per share Domicile, legal form, jurisdiction, nature of operations, governing legislation Name of the controlling entity and the ultimate controlling entity
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Effective Date & Amendment Timeline (paras. 151–155)
Amendment history at a glance
Base Standard: periods beginning on/after 1 January 2008 (earlier application encouraged). Transitional provisions (former paras. 151–152) were deleted by IPSAS 33 – first-time-adoption relief now lives exclusively there. IPSAS 1 (2000) was superseded (para. 155, "Withdrawal").
EffectiveChange
1 Jan 2011Paras. 79, 82 – Improvements to IPSAS (Jan 2010)
1 Jan 2012Para. 80 – Improvements to IPSAS (Nov 2010)
1 Jan 2013Paras. 150, 7A, 95A, 148D (IPSAS 28); paras. 75, 129, 148, 148A–148C (IPSAS 30)
2015Paras. 4, 7, 12, 88(n), 95(d), 97, 103, 118(c), 134, 135, 139 – IPSAS 35/38 suite
1 Jan 2017Paras. 29, 44, 70, 73, 74, 109, 116; Appendix A deleted – Improvements to IPSAS 2015
1 Jan 2018Paras. 5, 6, 12 deleted; paras. 7, 97, 116 – Applicability of IPSAS & IPSAS 39
1 Jan 2019Para. 135 – IPSAS 40, Public Sector Combinations
1 Jan 2023Paras. 7, 79, 82, 101, 102, 138; new 125A–125C – IPSAS 41, Financial Instruments
1 Jan 2025Paras. 88, 102, 107 (IPSAS 44); paras. 7, 92, 94, 101, 125C, 134, 148 (IPSAS 45); paras. 133, 134, 141, 143 (IPSAS 46)
1 Jan 2026Paras. 50, 88, 94, 135 – IPSAS 47, Revenue
1 Jan 2026, retrospectiveNew 83A, 83B, 86A, 87A–87C; amended 70, 80, 82, 84, 85, 87 – Improvements to IPSAS, 2023 (current/non-current package, section 11)
Two separate amendment packages both bite for periods beginning on/after 1 January 2026 – IPSAS 47 and the Improvements to IPSAS, 2023 current/non-current liability package. Both belong on the same 2026 effective-date checklist.
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Relationship to IAS/IFRS – Comparison with IAS 1
Comparison – IPSAS 1 vs IAS 1
IPSAS 1 is drawn primarily from IAS 1 (Revised 2003), including the IASB's May 2008 & April 2009 Improvements to IFRS. IPSASB policy is to converge accrual-basis IPSAS with IFRS where appropriate for public sector entities, departing only where IFRS requirements/terminology don't fit, or where extra commentary is needed.
TopicIPSAS 1IAS 1
Going concernPublic-sector-specific discussion (e.g. taxing power)No equivalent discussion
Statement of changes in equityREQUIRES a statement showing ALL changes in net assets/equityPermits an all-changes statement, OR one excluding owner transactions
Statement names"Statement of financial performance"; "net assets/equity""Income statement"/SOPL; "equity"
Income vs revenueUses the narrower "revenue" onlyUses the broader "income," which also captures gains
Responsibility for F/SContains commentary on who prepares/presents (paras. 19–20)No equivalent commentary
TimelinessExplicit commentary (para. 69) – no equivalent Framework existed historicallyNo equivalent explicit commentary
Extraordinary itemsDoes not explicitly preclude presenting themProhibits presenting any items as extraordinary
IPSAS 44 (2022) brought forward the IAS 1 amendments consequential on IFRS 5 that had previously been excluded pending an IPSASB view on public sector applicability – IPSAS 1 is now fully current with those changes too.
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Statement Templates (Implementation Guidance IG1–IG4)
How to use these templates
These illustrate one way of meeting IPSAS 1's minimum requirements, drawn from the Standard's own Implementation Guidance (a national government example). IPSAS 1 does not prescribe order or exact line descriptions – adapt to each entity's circumstances. SOFPerformance templates (nature & function methods) are shown in section 12; this section covers the SOFP, the Statement of Changes in Net Assets/Equity, and the accounting-policies extract.
Statement of Financial Position – as at Dec 31, 20X2 (thousands of currency units)
Line item20X220X1
ASSETS – Current
Cash and cash equivalentsXX
ReceivablesXX
Inventories, prepayments, otherXX
Total current assetsXX
Non-current
Infrastructure, plant & equipment; land & buildingsXX
Investments in associates; other financial & intangible assetsXX
Total assetsXX
LIABILITIES – Current
Payables, short-term borrowings, provisionsXX
Social benefits, employee benefits, superannuationXX
Non-current – long-term borrowings, provisions, social/employee benefitsXX
Total liabilitiesXX
Net assetsXX
NET ASSETS/EQUITY
Contributed capital, reserves, accumulated surpluses/(deficits), NCIXX
Total net assets/equityXX
Statement of Changes in Net Assets/Equity – condensed (para. 118–119)
MovementTotal
Balance at Dec 31, 20X0X
Change in accounting policy(X)
Restated balanceX
Gain on property revaluationX
Exchange differences on translation(X)
Surplus for the periodX
Balance at Dec 31, 20X1X
Full illustration reconciles each component of net assets/equity (contributed capital, reserves, translation reserve, accumulated surpluses, NCI) from opening to closing balance, per para. 119(c).
Statement of Accounting Policies (Extract)
Reporting Entity
National government of Country A, per the Public Finance Act 20XX – comprising central government ministries and commercial public sector entities.
Basis of Preparation
Complies with IPSAS for the accrual basis. Measurement base: historical cost adjusted for asset revaluations. Prepared on a going concern basis; policies applied consistently.
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Statement / Process Mapping
Concept-to-statement mapping table
IPSAS 1 concept / requirementStatement(s)Notes
Current/non-current or liquidity classificationSOFPStructural choice, applied consistently
By nature / by function expense presentationSOFPerfPolicy choice; function needs extra note disclosure
Revaluation surplus, defined-benefit remeasurementsNA/ENever reallocated to surplus/deficit
FX translation, cash-flow-hedge reclassificationsNA/E SOFPerfRecycled on disposal/derecognition
Dividends / distributionsNA/EA distribution, not a SOFPerf expense
Budget-vs-actual comparisonBudgetMandatory only if the budget is public (IPSAS 24)
Cash flow statement itselfCash FlowThe only statement not on the accrual basis (IPSAS 2)
Going concern material uncertaintyNotesDisclosed regardless of the conclusion reached
Capital management & puttable instrumentsNotesParas. 148A–148D
Fair presentation: compliance & departure decision
- Apply IPSAS + necessary extra disclosure → PRESUMED fair presentation (para. 27)
- Would compliance mislead so badly it conflicts with the objective of financial statements? (extremely rare test, para. 31)
- Framework PERMITS departure → SHALL depart, disclosing the fair-presentation statement, the departed requirement, and financial impact per period
- Framework PROHIBITS departure → disclose the requirement, why it misleads, and the adjustments that would have achieved fair presentation
A departure driven purely by statutory/legislative requirements does not qualify for this process at all (para. 37) – that is simply non-compliance if material.
Current vs non-current liability – decision flow (post-2023)
- Settlement due ≤12 months, normal operating cycle, or held for trading? → CURRENT (para. 80(a)–(c))
- Otherwise: does the entity have the RIGHT, at the reporting date, to defer settlement ≥12 months? (para. 80(d), 83A)
- Is that right subject to a covenant tested on/before the reporting date? If yes → affects the right (83B(a)). If tested only after → doesn't affect the right, but triggers disclosure (83B(b), 87A)
- Result: right exists → NON-CURRENT. No right (or already breached) → CURRENT, regardless of intent (86A)
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Related Standards – Cross-Reference Map
How IPSAS 1 connects across the IPSAS body of literature
StandardNature of the connection
IPSAS 2Cash Flow Statements – governs the cash flow statement in full (§14) and cash-flow offsetting
IPSAS 3Accounting Policies – policy-selection hierarchy (§6); comparative restatement for policy changes/errors (§9, §13)
IPSAS 4Foreign Exchange Rates – presentation currency (§10); translation gains/losses routed outside surplus/deficit
IPSAS 12Inventories – subclassification example on the SOFP; write-down disclosure trigger
IPSAS 14Events after the Reporting Date – non-adjusting event disclosures for liability reclassifications (§11)
IPSAS 19Provisions – provisions line item and offsetting example (§8, §10); contingent liability note ordering
IPSAS 24Budget Information – mandatory budget-comparison component where the budget is public (§5)
IPSAS 28Financial Instruments: Presentation – puttable-instrument terms (para. 7A); equity-vs-liability settlement options (§11, §16)
IPSAS 30Financial Instruments: Disclosures – maturity-date disclosures; capital-management lineage, largely superseded by IPSAS 41
IPSAS 33First-time Adoption – now the sole home for transitional relief IPSAS 1 formerly carried directly (§17)
IPSAS 34 / 35Separate / Consolidated F/S – IPSAS 1 applies equally to both (§1); NCI presentation (§10)
IPSAS 39Employee Benefits – function-of-expense additional disclosure (§12); remeasurement reserve type (§22)
IPSAS 41Financial Instruments – reclassification adjustments, hedge-reserve items, FV-through-NA/E gains/losses (§10, §12, §13)
IPSAS 42Social Benefits – social benefits liabilities line item & subclassification by scheme (§10, §12)
IPSAS 44Held for Sale & Discontinued Operations – held-for-sale line items; discontinued-ops single line (§10, §12)
IPSAS 45Property, Plant & Equipment – measurement-model disaggregation driver; revaluation surplus reserve type
IPSAS 46 / 47Measurement / Revenue – measurement-basis & estimation-uncertainty guidance; revenue subclassification (§15, §12)
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Quick-Reference Glossary – Net Assets/Equity Reserve Types
Revaluation surplus
IPSAS 31 (intangibles) / IPSAS 45 (PP&E) – never reallocated to surplus/deficit; may transfer to accumulated surpluses as the asset is used or derecognized.
Defined-benefit remeasurements
IPSAS 39 – never reallocated to surplus/deficit.
Foreign operation translation reserve
IPSAS 4 – reallocated to surplus/deficit on disposal of the foreign operation.
Cash flow hedge reserve
IPSAS 41 – the effective portion; generally reallocated when the hedged item affects surplus/deficit.
FV through net assets/equity
IPSAS 41 – equity instruments: never reallocated. Debt instruments: reallocated on derecognition.
Own-credit-risk reserve
IPSAS 41 – fair-value changes attributable to changes in a designated liability's own credit risk.
Financial statement key
SOFP Statement of financial position SOFPerf Statement of financial performance NA/E Net assets/equity (statement of changes) Budget Budget-to-actual comparison (IPSAS 24)