Term of the Day - 15 March 2024

Today’s Term is “IPSAS”.

IPSAS stands for International Public Sector Accounting Standards, a set of accounting standards issued by the International Public Sector Accounting Standards Board (IPSASB) for use by governments and other public sector entities worldwide. IPSAS aim to improve the quality, consistency, and transparency of financial reporting in the public sector, enhancing accountability and facilitating better decision-making.

A few IPSAS include:

1. IPSAS 1: Presentation of Financial Statements: Sets out the principles for presenting financial statements, including requirements for the statement of financial position, statement of financial performance, cash flow statement, and statement of changes in net assets/equity.

2. IPSAS 17: Property, Plant, and Equipment: Provides guidance on accounting for tangible assets, including recognition, measurement, depreciation, and impairment.

3. IPSAS 19: Provisions, Contingent Liabilities, and Contingent Assets: Addresses the accounting treatment for provisions, contingent liabilities, and contingent assets, ensuring proper recognition and disclosure.

4. IPSAS 24: Presentation of Budget Information in Financial Statements: Prescribes requirements for presenting budget information in financial statements, promoting transparency and accountability in budget execution.

5. IPSAS 33: First-Time Adoption of Accrual Basis International Public Sector Accounting Standards: Provides guidance for entities transitioning to accrual basis accounting under IPSAS, including initial recognition and measurement of assets, liabilities, and equity.

IPSAS play a crucial role in harmonizing accounting practices across the public sector, enabling comparability of financial information and fostering trust among stakeholders. Compliance with IPSAS enhances transparency, accountability, and governance in public sector financial reporting.