IPSAS - First-Time Adoption, Transition and Implementation (2 days)
Entities that elect to adopt IPSAS accruals basis of accounting face a number of challenges. While the technical challenge of applying all relevant IPSAS should not be underestimated, just as important are making the right choices over accounting policies to select; whether and how to use the optional transitional provisions in IPSAS; managing stakeholders; data gathering; ensuring systems and processes are adequate and managing the overall transition project.
With the release of IPSAS 33 and a two year gap before it become mandatory, the challenges facing first-time adopters over the next year or two are increased as decisions will need to be taken over whether or not to utilise the new Standard. Entities currently adopting IPSAS will also need to understand how the new Standard might affect them if they are still using transitional provisions when IPSAS 33 becomes mandatory.
In general, entities that change accounting policies to comply with IPSAS do so retrospectively. To ease this transitional process the IPSASB allows the use of transitional provisions. Currently these reliefs are found in individual Standards and where taken should not affect the entity’s ability to fairly present its financial statements, nor prevent it from stating compliance with IPSAS. However, entities that adopt IPSAS using IPSAS 33 will no longer have the reliefs available from individual Standards but will follow the requirements of IPSAS 33. For pragmatic reasons IPSAS 33 presents certain transitional reliefs, which if used, might prevent the entity from stating that its accounts are fairly presented and compliant with IPSAS until the expiry of those reliefs or the items concerned have been fully recognised and measured according to the relevant Standards. These, reliefs where taken, will present new challenges to preparers, stakeholders and auditors. Other reliefs from full retrospective adjustment, it taken, should not affect fair presentation and compliance. In each case entity’s will need to carefully consider whether or not take the reliefs so as to ease their transition, while considering the practicalities, costs, benefits and impacts upon stakeholders.
Using real-world examples and case studies, this two-day course provides a comprehensive look at the complex issues facing first-time adopters of accrual based IPSAS, whether transitioning from the Cash Basis IPSAS or from local accruals-based accounting frameworks. Coverage includes the current transitional provisions in IPSAS, IPSAS 33 and guidance on setting up the conversion project, with application demonstrated via practical case studies and examples.
This practical program includes discussion of real-world experiences in transitioning to IPSAS and answers to implementation questions. Strategies and guidance for establishing IPSAS accounting policies are also discussed.
The program answers questions such as:
- What does IPSAS 33 permit and require, what options are available and what are the pros and cons of the different approaches?
- What are the practical consequences in the year of full adoption when following IPSAS 33
- What are the current transition requirements of each IPSAS if IPSAS 33 is not followed and what are the implications of the available choices?
- What are the available policy options and their short-term and long-term consequences?
- How can the costs and benefits of various courses of action be determined?
- In what ways will systems require modification in order to implement accrual based IPSAS?
- What are the most common pitfalls that occur during transition to accrual based IPSAS and how can they be avoided?
- Brief overview the principles behind accruals basis IPSAS and its key Standards
- Overview of the current approach set out in IPSAS for first-time adopters
- Overview of the approach set out in IPSAS 33 and its effective date
- Net Surplus or Deficit for the Period - Fundamental Errors and Changes in Accounting Policies – IPSAS 3
- Principles of retrospective accounting for the effects of changes in accounting policy on first-time adoption and the disclosures to be made
- Current Transitional Provisions and Implementation Guidance
- Presentation of Financial Statements – IPSAS 1
- Property, Plant and Equipment – IPSAS 17
- Investment Property – IPSAS 16
- Intangible Assets – IPSAS 31
- Borrowing Costs – IPSAS 5
- Revenue from Non Exchange Transactions (Taxes and Transfers) – IPSAS 23
- Leases – IPSAS 13
- The Effects of Changes in Foreign Exchange Rates – IPSAS 4
- Financial Instruments – IPSAS 28, 29 and 30
- Related disclosures
- Application of IPSAS 33
- Principles of first-time adoption under the new Standard
- Distinguishing between transitional and first IPSAS financial statements
- What is required to enable a statement of full compliance with IPSAS?
- What information is required to be presented, and disclosed?
- Specific prohibitions from retrospective application for first-time adopters
- Optional exemptions that affect the entity’s ability to state compliance with fair presentation and accruals basis IPSAS during the transition period
- Assessing materiality of such exemptions where taken
- How will auditors and stakeholders respond if financial statements are not fairly presented?
- Other optional exemptions that do not affect the entity’s ability to state compliance with accruals basis IPSAS
- Guidance provided by IPSAS 33
- Effective date of IPSAS 33
- Pros and cons of adopting IPSAS 33 before its effective date of 1 January 2017
- Implications for entities who have adopted IPSAS but are still using transition reliefs
- Implications for entities that are already transitioning to IPSAS but have not yet presented their first fully compliant IPSAS financial statements
- Consolidation boundaries
- Who needs to consolidate on first-time adoption?
- First-time adoption reliefs available currently under IPSAS 6, 7 and 8 compared with those under their replacement Standards, IPSAS 34-38
- Interaction of IPSAS 34-38 reliefs with IPSAS 33
- Implications for first-time adopters of using the transitional provisions
- Implications for States which wish to apply IPSAS 22 Disclosure of Financial Information About the General Government Sector
- Managing the IPSAS Transition Process
- Planning the project
- Involving the whole business and its stakeholders
- Project and change management
- Training the project team and operations staff
- Communicating with stakeholders
- Gathering data on assets and valuing them
- Process and systems implications
- Live group instruction, cases, examples, group work, open discussions
- Description and explanation of IPSAS technical requirements in clear and simple language
- Identification of the critical issues involved in the transition to and implementation of IPSAS
- Extensive use of case studies and examples with practical application of the requirements of the IPSAS transitional provisions
- Active participation is encouraged
- All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials
Understanding of accounting principles based on national standards together with some understanding of IPSAS (refer to Course 3100: IFRS versus IPSAS and Course 3020: IPSAS Fundamentals - Accruals Basis). No advance preparation is required for this course.
- Understand and apply IPSAS 33
- Apply the requirements of the IPSAS transitional provisions
- Understand the available policy options and their short-term and long-term consequences
- Determine the costs and benefits of applying a transitional approach over time to a short, full adoption
- Implement practical strategies for managing the transition to IPSAS and avoid common pitfalls
- Consider the system modifications and other changes that will be required in order to implement IPSAS
- Gain the understanding required to develop an effective implementation plan for your company
Who should attend?
- Finance and accounting managers of public sector entities considering to adopt IPSAS
- Government officials and project managers responsible for IPSAS transition
- Accountants and finance staff of public sector entities and similar agencies about to start or who are in the process of adopting IPSAS
- Internal and external auditors of entities that are in the process of adopting IPSAS
- Accounting practitioners and consultants
- Accounting academics
CPE / CPD Accreditation
IASeminars is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.
Field of study: Accounting
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IASeminars is proud to have been named as an ICAEW Partner in Learning, working together to offer the ICAEW IFRS Certificate to our clients worldwide. ICAEW (The Institute of Chartered Accountants in England and Wales) is a world leading professional membership organisation that promotes, develops and supports over 145,000 chartered accountants worldwide. CPE certificates obtained from attending IASeminars courses are an ideal way for ICAEW members and others to demonstrate their continuing professional development, provided that the topic is relevant to their learning and development needs.
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