IPSAS - Making the Transition (online)
Moving to accounting under International Public Sector Accounting Standards (IPSAS) can be a challenging endeavour. Ensuring proper convergence to IPSAS entails not only a vast amount of work in the accounting arena of any given public sector entity or government but also often implies major changes in business processes and practices.
The IPSASB has issued IPSAS 33 First-time Adoption of Accrual Basis IPSASs (the standard) to assist the transition to IPSAS. IPSAS 33 includes implementation guidance illustrating the requirements in the standard.
In addition, by using a project management approach in adopting IPSAS an organisation/government can make certain that, for example:
- the project gets necessary support from top management;
- a sound governance structure is put in place;
- communication and training plans are developed and managed;
- new accounting policies are written;
- and necessary alignment of business processes will take place in a timely manner.
Sound project management may facilitate cost-effective adoption of IPSAS and a broader strengthening of business practices across the implementing organisation/government.
Transition to IPSAS covers a wide range of situations:
- Moving from a not IPSAS compliant cash accounting to IPSAS cash accounting,
- Moving from IPSAS cash accounting to full accrual accounting under IPSAS,
- Moving from modified accrual-based accounting or some accrual accounting standards to full accrual accounting under IPSAS.
The implementation of IPSAS is often seen as an integral part of public sector entities’ quest to strengthen governance (see chapter two of this book). Making the change to IPSAS in public entities and in particular within governments is dependent on political support and on the necessary legal provisions being made.
Acknowledging the importance and the difficulty of the adoption of accrual basis IPSAS, the IPSASB released, on 31 January 2015, IPSAS 33, First-time Adoption of Accrual Basis International Public Sector Accounting Standards (IPSAS). The objective to IPSAS 33 is ‘to provide guidance to a first-time adopter that prepares and presents financial statements following the adoption of accrual basis IPSASs, in order to present high quality information:
- That provides transparent reporting about a first-time adopter’s transition to accrual basis IPSASs;
- That provides a suitable starting point for accounting in accordance with accrual basis IPSASs irrespective of the basis of accounting the first-time adopter has used prior to the date of adoption; and
- Where the benefits are expected to exceed the costs’
IPSAS 33 is mandatory to first-time adopters for a period beginning on or after 1 January 2017. Earlier application is permitted.
This module 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?
- Transitioning to the Accrual Basis of Accounting
- Guidance on the transition from the cash to the accrual basis of accounting
- Identifying and responding to the change management implications
- 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
- 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
This is a self-study online module. It includes interactive lessons, a case study, practice and final exams and, on passing the final exam you, will be awarded a CPE certificate.
All course content may be accessed through any device: desktop, laptop, tablet or smartphone so you can learn whenever and wherever you wish.
Watch a short course demonstration
Understanding of basic accounting principles based on any national standards in the public sector. 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 public sector entity
Who should attend?
Participants who require a high level overview and awareness of the core IPSAS accruals based standards including:
- 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 (e.g. UN) in the process of adopting IPSAS
- Accountants and finance staff moving from private to public sector environments
- Operations mangers of public entities needing an awareness of public sector financial reporting
- Internal auditors of entities that have adopted IPSAS or are in the process of doing so
- Accounting practitioners, consultants and external auditors
- Analysts of public sector entities
- Our eLearning courses are designed to allow online interaction with our expert instructors, while covering the same content as our highly popular live training courses.
This module is designed as a self-study course and is not supported by an instructor. If you prefer instructor led online training you should choose our Course 3030e: IPSAS (Accrual Basis) - Basics online course.
To bring this course in-house please contact us and we will be pleased to assist