Adopting international reporting standards to enhance transparency and support fiscal policy Abdul Khan Fiscal Affairs Department Presentation at the Regional Workshop on Financial Reporting and Management of Fiscal Risks in Astana, Republic of Kazakhstan, May 21-23, 2014
25
Embed
Adopting international reporting standards to enhance transparency and support fiscal policy
Adopting international reporting standards to enhance transparency and support fiscal policy . Abdul Khan Fiscal Affairs Department Presentation at the Regional Workshop on Financial Reporting and Management of Fiscal Risks in Astana, Republic of Kazakhstan, May 21-23, 2014. - PowerPoint PPT Presentation
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Adopting international reporting standards to enhance transparency
and support fiscal policy Abdul Khan
Fiscal Affairs DepartmentPresentation at the Regional Workshop
on Financial Reporting and Management of Fiscal Risks
in Astana, Republic of Kazakhstan, May 21-23, 2014
2
Topics of this presentation
• Why use international standards? • What does it mean to introduce international
standards like IPSAS or IFRS? • Examples of countries that have introduced
IPSAS or IFRS. • Lessons from other countries and other
factors to keep in mind during introduction of IPSAS
Japan IMF Sub Acc
3
Why use international standards?(1/2) • Support transparency and oversight of
public finances and policy decisions :– Consolidated “whole-of-government” statements
would support policy making through fuller information on assets, liabilities, revenues, expenses, and cash controlled by government
– Reporting assets more fully would improve transparency and provide basis for investment policies
– Reports more credible, readily understood, and comparable world-wide
4
Why use international standards?(2/2)
• Savings from avoidance of need to issue and maintain own standards
• Benefits from international expertise• Synergies in the preparation, audit, and
analysis of financial reports– accounting professionals from private sector
can be used to help with transition– Mobility between private and public sector
5
• IPSAS provides standards for financial statements, including for specific transactions or assets and liabilities:– Tax revenues, PPPs, government guarantees etc
• Implementation of IPSAS would involve– GAP analysis - “where we are?” Vs “where do we
wish to be?”– Preparing a plan to implement– Management of implementation including change
management
What does it mean to introduce IPSAS?
6
IPSAS implementation: Some issues to be aware of ….• International Vs national
– Some IPSAS activities may be seen to driven by issues that are not a concern in a particular country
– Issues that may be important for a country may not be a global priority
• To address these issues, countries (standard setters, MoF) should actively participate in IPSASB deliberations– attend meetings, review and comment on papers etc.
Costs of IPSAS implementation – data should be interpreted with caution• Cost information often includes costs of other reforms besides
accrual accounting
• Cost estimates for EU Member States fall within the range of 0.02-0.1 percent of GDP
• Likely to vary according to the state of existing framework
Country Cost RemarksSwitzerland €40m Accrual budgeting and
accounting; 80% of costs re IT system
Austria €30m Accrual budgeting and accounting, MTEF and PB reforms
EU Up to €50m
For a medium-sized EU country
8
Examples of countries that have introduced IPSAS or IFRS
• Switzerland and Austria introduced IPSAS with some exceptions
• U.K., Australia, and New Zealand adopted IFRS with some exceptions–New Zealand decided to adopt IPSAS
from 2014
9
Switzerland - IPSAS• New Accounting Model introduced 2007• Based on IPSAS• Budgeting and accounting on the same
basis• Main exceptions to IPSAS
– Employee pension liabilities not recognized, but disclosed as contingent liabilities
– Consolidated financial statements of all controlled entities: phased approach adopted
10
SwitzerlandOverview of financial statements
11
Austria: IPSAS• IPSAS mentioned in Organic BL (2009)
– Part of comprehensive reform of budget framework
• Budgeting and accounting on same basis• Main exceptions to IPSAS
– Pension liabilities not recognized, but disclosed– Consolidated financial statements for controlled
entities intended to be done in future
12
The United Kingdom: IFRS• Adopted IFRS from 2009-10
– IPSAS also used where appropriate. • Produces whole-of government consolidated
financial statements; consolidates– Bank of England– some 1500 entities, including sub-national
government entities• Main departure from IFRS
– State-owned banks not consolidated– Network Rail not consolidated – in line with statistical,
but not accounting standards
13
The U.K: Reconciliation of WGA and National Accounts - Public Sector Net Debt
14
The U.K.: Reconciliation between the WGA and National Accounts: Current Deficit