Preface to IPSAS
Active
Preface to International Public Sector Accounting Standards
Sets out the objectives, scope, publication suite, authority, equal authority of bold/plain type paragraphs, dual accrual/cash development tracks, and voluntary adoption framework of the IPSASB.
Active Standard
The Preface to International Public Sector Accounting Standards sets out the objectives of the IPSASB and explains the scope and authority of IPSAS. It explains the dual development tracks (converged with IFRS and public-sector-specific) and the voluntary adoption framework.
1
History & Purpose of the Preface (para. 1)
Purpose
Sets out the OBJECTIVES of the International Public Sector Accounting Standards Board (IPSASB) and explains the SCOPE and AUTHORITY of IPSAS. Used as a reference for interpreting Consultation Papers, discussion documents, Exposure Drafts, Recommended Practice Guidelines, and Standards the IPSASB develops and issues.
Revision history
DateEvent
2000The Preface was first issued
November 2004Revised
December 2006Amended
March 2012Revised
April 2016Revised – current version
2
Objective of the IPSASB (paras. 2–7)
Origin – an independent body under IFAC
IFAC's mission is to serve the public interest by contributing to high-quality international standards, strong accountancy organizations, and public-interest advocacy. In pursuing that mission, the IFAC Board established the IPSASB as an INDEPENDENT standard-setting body operating under IFAC's auspices (paras. 2–3).
Information on the IPSASB's membership, terms of office, meeting procedures, and due process sits in the IPSASB's Terms of Reference, approved by the IFAC Board (para. 4).
The stated objective (para. 5–6)
Serve the public interest by developing HIGH-QUALITY accounting standards and publications for public sector entities worldwide, preparing general purpose financial reports
Intended to ENHANCE the quality and transparency of public sector financial reporting – better information for financial management and decision-making. The IPSASB supports CONVERGENCE: international/national public sector standards, and accounting/statistical reporting bases where appropriate (echoed later in IPSAS 22 and IPSAS 24).
3
The IPSASB's Publications Suite (para. 7)
Four publication types, in descending order of authority
PublicationPurpose
IPSASThe STANDARDS to be applied in preparing general purpose financial reports of public sector entities
Recommended Practice Guidelines (RPG)Guidance on good practice that entities are ENCOURAGED, not required, to follow
StudiesAdvice on financial reporting issues, based on study of good practices and effective methods
Other papers & research reportsNew information/insights from literature searches, surveys, interviews, experiments, case studies, and analysis
4
Scope of the Standards – Who IPSAS Applies To (paras. 8–12)
The three-part entity test (para. 10)
Responsible for delivering SERVICES to benefit the public and/or redistribute income and wealth (services = goods, services, AND policy advice, including to other public sector entities) Mainly finance activities, directly or indirectly, through TAXES and/or transfers from other government levels, social contributions, debt, or fees Do NOT have a primary objective to make PROFITS
General purpose financial reports – and materiality
IPSAS govern GENERAL PURPOSE financial reports – those meeting the needs of users unable to require reports tailored to their own specific needs (para. 9).
Any LIMITATION on a specific Standard's applicability is stated within that Standard itself. IPSAS are NOT meant to apply to IMMATERIAL items (para. 11).
5
Equal Authority – Bold vs Plain Type (para. 12)
A formatting convention, not a hierarchy of obligation
The IPSASB's policy: ALL paragraphs in an IPSAS have EQUAL AUTHORITY – the authority of a provision is determined by the LANGUAGE used ("shall," for instance), never by whether it's set in bold or plain type.
IPSAS approved after 1 January 2006 use bold AND plain type – both carry equal authority BOLD paragraphs indicate the MAIN PRINCIPLES An individual IPSAS is read in the context of ITS OWN objective and Basis for Conclusions (where one exists), AND this Preface
6
IPSAS for the Accrual and Cash Bases (paras. 13–15)
Accrual IPSAS – two development tracks
Converged with IFRS – adapted to a public sector context, preserving the IFRS accounting treatment and original text UNLESS a significant public sector issue warrants departure (this is exactly what every "Relationship to IAS/IFRS" section throughout this poster library documents) Public-sector-specific issues – dealing with matters IFRS doesn't address, or hasn't developed a Standard for (e.g. IPSAS 22, 23, 24 – all built independently, with no IFRS equivalent)
A comprehensive Cash Basis IPSAS too
Alongside the accrual-basis suite this library covers, the IPSASB has ALSO issued a comprehensive CASH BASIS IPSAS – including mandatory and encouraged disclosure sections – for jurisdictions not yet ready to adopt accrual accounting (para. 15). Para. 14 is [Deleted].
7
Moving from the Cash Basis to the Accrual Basis (paras. 16–19)
A gradual, encouraged transition
The Cash Basis IPSAS ENCOURAGES voluntary accrual-based disclosures even while the core financial statements remain cash-based. Entities transitioning MAY include particular accrual disclosures along the way – their status (audited/unaudited) and location (notes vs. a separate supplementary section) depends on the information's characteristics (reliability, completeness) and jurisdictional legislation (para. 16).
Transitional provisions, and the compliance statement
Certain accrual-basis IPSAS include TRANSITIONAL provisions – extra time to meet full requirements, or relief on initial application (para. 17) An entity may ELECT to adopt accrual accounting at ANY time; once elected, transitional provisions govern the length of the transition. On expiry, the entity reports in FULL accordance with all accrual IPSAS
IPSAS 1 para. 28's compliance rule: an entity whose statements comply with IPSAS makes an EXPLICIT, UNRESERVED statement of that compliance in the notes – statements are NOT described as IPSAS-compliant unless they comply with ALL requirements (para. 18). IPSAS 1 also requires disclosure of the extent any transitional provisions were applied (para. 19).
8
Authority of the International Public Sector Accounting Standards (paras. 20–23)
Regulation is jurisdiction-specific
Within each jurisdiction, REGULATIONS may govern general purpose financial reports – statutory reporting requirements, financial reporting directives/instructions, and/or accounting standards from governments, regulators, or professional bodies (para. 20). The IPSASB believes IPSAS adoption, with disclosure of compliance, materially improves reporting quality – strengthening public finance management, resource-allocation assessments, transparency, and accountability (para. 21).
No enforcement power – a soft-law framework
Neither the IPSASB nor the accounting profession has the power to REQUIRE compliance with IPSAS. The IPSASB's success depends entirely on recognition and support from interested groups acting within their own jurisdictions (para. 23). The IPSASB acknowledges governments' and national standard-setters' RIGHT to set their own standards, while strongly encouraging IPSAS adoption and harmonization – and offering IPSAS as a useful basis for jurisdictions developing standards from scratch (para. 22).
9
Language (para. 24)
English is the official text
The official text of IPSAS and other IPSASB publications is that approved by the IPSASB in ENGLISH. IFAC member bodies are authorized to prepare TRANSLATIONS (after obtaining IFAC approval), at their own cost, for their own jurisdictions as appropriate.
10
How the Preface Anchors This Poster Library
Every recurring pattern across the IPSAS 1–51 posters traces back here
The IAS/IFRS comparison section in every convergent Standard exists BECAUSE of §6's convergence policy – preserving original IFRS text unless a public sector issue justifies departure The "no IAS/IFRS equivalent" notice on IPSAS 22, 23, and 24 reflects §6's SECOND track – public-sector-specific issues IFRS never addresses The withdrawn-standard redirect posters (6, 7, 8, 13, 15, 17, 25) exist because the IPSASB periodically restructures the suite – a natural consequence of an evolving, independent standard-setter (§2) Terminology conventions used throughout ("statement of financial performance," "net assets/equity," "surplus or deficit") are IPSASB house style choices, not IFRS terms – a direct product of the adaptation process described in §6
11
Related Documents – Cross-Reference Map
How the Preface connects across the Handbook
DocumentNature of the connection
The Conceptual FrameworkSits immediately after the Preface in the Handbook; para. 10's footnote points directly to Conceptual Framework para. 1.8 for the full range of applicable public sector entities
IPSAS 1Paras. 18–19 of the Preface quote/reference IPSAS 1's compliance-statement and transitional-provision disclosure requirements directly
IPSAS 3Governs how entities select accounting policies where explicit IPSAS guidance is absent – operating within the framework this Preface establishes
IPSAS 22 / 24Both directly implement the convergence-with-statistical-reporting objective named in §2's objective statement
IPSAS 33First-time Adoption – governs the length and mechanics of the cash-to-accrual transition the Preface introduces in outline (§7)
Cash Basis IPSASThe complementary cash-basis pronouncement referenced in §6
12
Quick-Reference Glossary
IPSASB
The International Public Sector Accounting Standards Board – an independent standard-setting body operating under IFAC's auspices.
General purpose financial reports
Reports meeting the needs of users unable to require reports tailored to their own specific information needs.
Recommended Practice Guidelines (RPG)
IPSASB guidance on good practice that public sector entities are encouraged, but not required, to follow.
Services (in the entity-scope test)
Goods, services, and policy advice – including services provided to other public sector entities.
Cash Basis IPSAS
A comprehensive standard for entities reporting on a cash basis, with mandatory and encouraged disclosure sections.
Transitional provisions
Relief allowing additional time or reduced requirements when an entity first applies a specific accrual-basis IPSAS.