Accounting Standards for Government Entities other than Government Business Enterprises (GBEs). This accounting standard is international standard for Governments, Government Autonomous bodies, Government Financial Institutions (not commercial entities). IFRS is international standard for Corporates, which is applicable to Government Business Enterprises. Different nations have adopted and adapted the IPSAS, Cash or Accrual or modified Cash IPSAS. Governments has named the standards by the name of respective Governments.

1. CASH IPSAS
Brief
IPSAS IN YOUR POCKET, 2013 EDITION, BY DELOITTE

2. Cash IPSAS
2

Standard
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Cash Receipt & Payment

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All source/ purpose of cash raised & spent during the period, balance on reporting date
Accounting Policies & Explanatory Notes
Analysis of Budget (Original, Revised) & Actual of those made publicly available
Explain material difference of Budget & Actual and whether difference of original
and revised budget virement/re-appropriation or other change
Opt modified cash/ accrual, full accrual-explain in note


such as receivables, investments and property, plant and equipment)
Financial Statements (FS)


Part 1 Mandatory: Full Compliance of Part 1 be reflected in the note
Part 2 Voluntary Disclosures (liabilities, such as payables and borrowings; some non-cash assets,
May disclose cash flow statement under IPSAS 2
Cash spent in settling obligation/ procuring materials on behalf of entity by
third party(higher tier of Govt./ Donor Agency)

disclose separately in cash flow statement, classifying appropriately as per entity’s
accounts
When third party/ recipient informed/ entity verified

3. Cash IPSAS contd.
3
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External Assistance received in cash, by significant class of funding agency, loan
and grants separately
Cash Balance not available for use by entity
Undrawn loan/ burrowing available for future operation
External assistance debt rescheduled/ cancelled with T&C
External Assistance loan, grant or guarantee cancelled/ obligation to refund for
violation of T & C- disclosure of amount and T & C
Accounting shall be on gross basis, except on net basis of administered/ agency
transaction for items having quick turnover, large amount and short maturity
Controlling Entity FS will follow IPSAS 6 in consolidation



Who authorized the date of financial reporting, date, authority to amend the FS
Accounting Policy & Explanatory Notes


adjustments for significant cash transactions of controlled entity in the FS of controlling
entity
Description, detail Schedules & Analysis of figures shown in statement
Not Applicable to Government Business Enterprises

4. CASH IPSAS
VOLUME II, HANDBOOK OF INTERNATIONAL PUBLIC SECTOR ACCOUNTING PRONOUNCEMENTS 2013 EDITION, BY IPSASB
Detail Outline

5. Part 1
5
1.2 The Cash Basis
 Cash Basis of Accounting
 Cash Equivalents
 Cash Controlled by the Reporting Entity
1.3
Presentation
and
Disclosure
Requirements
 Financial Statements
 Information to be Presented in the
Statement of Cash Receipts & Payments



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
Classification
Line Items, Headings and Sub-totals
Reporting on a Net Basis
Payments by Third Parties on Behalf of
the Entity
Accounting Policies and Explanatory
Notes


Structure of the Notes
Selection and Disclosure of Accounting
Policies
1.4 General Considerations
 Reporting Period
 Timeliness
 Authorization Date
 Information About the Entity
 Restrictions on Cash Balances and Access
to Borrowings
 Consistency of Presentation
 Comparative Information
 Identification of Financial Statements
1.5 Correction of Errors
1.6 Consolidated Financial Statements
 Scope of Consolidated Statements
 Consolidation Procedures
 Consolidation Disclosures

6. Part 1
6
1.7 Foreign Currency

Treatment of Foreign Currency
Receipts, Payments and Balances
1.10 Recipients of External Assistance
Cash
1.9 Presentation of Budget Information in
Financial Statements




Presentation of a Comparison of Budget
and Actual Amounts

External Assistance Agreements

External Assistance Received

Undrawn External Assistance

Receipt of Goods or Services

Disclosure of Debt Rescheduled or Cancelled
Multiyear Budgets

Note Disclosures of Budgetary Basis, Period
and Scope

Reconciliation of Actual Amounts on a
Comparable Basis and Actual Amounts in the
Fin Statements
Disclosure of Non-Compliance with Significant
Terms and Conditions
Transitional Provisions

7. Part 2
7
2.1 Encouraged Additional Disclosures
2.1 Encouraged Additional Disclosures (Contd.)

Future Economic Benefits or Service Potential

Joint Ventures

Going Concern

Financial Reporting in Hyperinflationary Economies

Extraordinary Items

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
Identifying Extraordinary Items
Administered Transactions


Consolidated Financial Statements

Outside the Control or Influence of the Entity
Comparative Information

Not Expected to Recur in the Foreseeable Future
The Restatement of Financial Statements

Distinct from Ordinary Activities


Selection and Use of the General Price Index
Assistance Received from Non-Governmental Organizations
(NGOs)
Recipients of External Assistance

Revenue Collection

“Pass-through” Cash flows
2.2 Governments and Other Public Sector Entities Intending to
Migrate to the Accrual Basis of Accounting

Transfer Payments


Disclosure of Major Classes of Cash Flows

Related Party Disclosures


Disclosures of Assets, Liabilities and Comparison
with Budgets
Consolidated Financial Statements

Acquisitions and Disposals of Controlled Entities and
Other Operating Units

Presentation of the Statement of Cash Receipts and Payments
Scope of Consolidated Statements – Exclusions from the Economic
Entity

8. CASH IPSAS
PART 1
Detail

9. Cash Basis
9
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Cash comprises cash on hand, demand deposits and cash equivalents (short-term, highly liquid
investments that are readily convertible to known amounts of cash, with minimum risk)
Entity controls the cash (tax/other revenue collected, appropriated, grants receipt, loans) when
it can use or benefit from it in pursuit of its objectives and can exclude or regulate the access
of others to that benefit
Temporary control for a period for money received or collected on behalf of another entity
Recognizes transactions and events only when cash is received or paid by the entity
Sources of cash, purpose for which used, balance & change over previous periods
Bank overdrafts which are repayable on demand are included as a component of cash
Cash movements between items within the agency does not form part of cash flow
Expenditures of departments and entities from a single bank account of one Government each department/ entity will report on the face of statement of cash receipt and payment a
separate column headed “treasury account” for appropriation from single account, classifying
source of funding, purpose for which allocated and amount utilized for respective purpose, reappropriated within the department and inter-department from one classification to another
Central Entity in charge of the Single Account shall recognize the cash receipt & payment on
net basis

10. Presentation & Disclosure Requirements
10


Accounting Policies (Principles, bases, conventions, rules, practices), Notes and
information those are material be consistent and be provided in the report
General Purpose Financial Statements (GPFS)

Statement of cash receipts, payments and balance
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
Controlled by the entity recognised
Controlled by third parties disclosed separately
Statements disclosing additional information for fair presentation and to enhance accountability
If Budget is in public domain, comparison of actual to estimate to be presented in
separate column to the above statement or presented as an additional statement
If entity adopts modified cash, transition to accrual accounting, it will be disclosed along
with the list of additional statements and disclosures in the notes
May present additional statement major fund wise, disclose source of burrowing &
deployment , type of receipt/ payment, budget and actual comparison thereof
Information to be Presented



Opening & Closing Cash Balance; total of the Entity
Receipt and Payment; Total, Group & Sub-group wise
On Gross Basis of the Entity, group, sub-group wise

11. Presentation & Disclosure Requirements
contd.
11

Payment and Receipt be reported on net basis

For transactions of other parties, whose figures are recognized in the accounts of the Entity
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Items having quick turnover, large amount, short maturities

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taxes collected by one tier of govt. on behalf of another and transferred
acceptance and repayment of demand deposits of a financial institution
Funds held for customers by an investment or trust entity
Transfers by a government department to third parties consistent with legislation or other government
authority
Funds administered by a central entity under the “single account” basis for management of government
expenditure of different departments
Pass through the bank account of the Entity as per law before transferred to ultimate recipient (purchase
and sale of investments)
Short term borrowings having maturity less than 3 months
Line items, headings and sub-totals should be presented
In case of Trust Account hold by the entity as an agent, payments or receipts shall not form
part of Entity’s Statement
Third Party payment to settle obligation, purchase Goods & Service for Entity


Third party and reporting entity belong to one economic entity/ don’t belong to one entity –
disclose separately, sub-classification wise (One Department purchasing for another Department)
Disclosed in the reporting period, when third party or the recipient formally advised Entity that
such payment has been made or Entity has verified the payment

12. Accounting Policies & Explanatory
Notes
12

Structure of Notes





basis of preparation of the financial statements
specific accounting policies selected and applied for significant transactions and other
events
additional information which is not presented on the face of the financial statements but is
necessary for a fair presentation
Each item on the face of the statement of cash and other financial statements should be
cross referenced to any related para(s) in notes
Selection and Disclosure of Accounting Policies & Disclosure under Part 2


Understandable & Relevant to all Stakeholders
Timely & Reliable


Accounting Policies



represents faithfully, neutral & complete in all materiality
Each accounting policy for understanding of the FS
Application of any transitional provision
Note does not explain/ rectify inappropriate accounting treatments

13. General Considerations
13

Reporting Period

Annual, Exceptional case, period long or short- explain reasons and ability or otherwise of
comparability




Timeliness


3 months ideal, max 6 months from reporting date
Authorization Date - disclose

authorisation date for financial statements, Authorizing Authority & if another body can
amend the published FS


Align with budget cycle- one time shift
Aligning with interim budget/ mid year assessment of entity’s finance- as & when required
52 week accounting cycle
Parliament/ a body of legislatures may amend- It will be another FS
Information about the Entity



Domicile, jurisdiction, legal form of the entity, legislation governing its operation
nature of the entity’s operations and principal activities
Tiers of controlling entity of the economic entity

14. General Considerations contd
14

Restrictions on Cash Balances and Access to Borrowings – disclose
with notes

Significant cash balances



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
not available for use
subject to external restrictions
Restriction on undrawn borrowing facilities available for future
operation/ capital financing
E.g. Controlled Entity Operates in foreign - balances are not available
due to exchange controls or other legal restrictions
entity holds cash collected for other parties as an agent but not yet
transferred to those parties
Consistency of Presentation and classification of items, unless change


results in better presentation of events or transactions
is required by a future amendment to this Standard

15. General Considerations contd
15

Entity amends presentation and Classification of FS,




Comparative Information for all numerical information of the previous period


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
reclassifies its comparative information of previous years
If impracticable to reclassify comparative amounts, disclose reason
E.g. major restructuring of service delivery arrangements; the creation of a new, or termination of a
major existing, government entity; a significant acquisition or disposal
with description, when required for understanding current FS
Not figures of FS for years prior to adoption of the standard
Unresolved legal dispute, notes of previous FS to be repeated with steps
Identification of FS




FS distinguished from other information in the GPFS
Each component of FS clearly identified
Highlights & repeats name of the reporting entity & whether the FS is of individual or
economic entity, reporting date & period of FS, reporting currency & level of precision
followed
Electronic Accounting Systems takes care of the requirement of this standard

16. Correction of Errors
16

Error due to Opening Balance in the FS
Adjust the cash at the beginning of the period
 Comparative information of all previous years be restated





unless impracticable to do so
Correction of previous FSs is not amendment of FS
Correction applies to cash statement and other
documents, if presented
Notes
nature of the error
 amount of the correction
 Statement on previous period correction


17. Consolidated Financial Statements
17

financial statements of an economic entity (group of controlled &
controlling, also called administrative entity/ financial reporting entity/
consolidated entity/group) presented as that of a single entity


Controlling entity to issue consolidated FS
financial reporting entity may consist of a number of controlled entities, e.g.,
Govt. Depts, agencies & GBEs



Controlled Entity operating under severe external long term restrictions excluded
Wholly owned (>90% voting power) controlled entity need not present
consolidated FS in the capacity of a controlling entity



Hence, reporting entity often notified by Legislation
However, if such entity represent key sectors or activities of a government, it may
present consolidated FS by notification of legislature
notes & disclosures required by Part 1 of this Standard will also be presented
on a consolidated basis
additional statements & disclosures made under Part 2 of this Standard will be
presented on consolidated basis

18. Consolidated Financial Statements
contd.
18

Consolidation Procedures


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
Cash balances and cash transactions between entities eliminated, presented on
net basis
In case of large number of entities and foreign locations, transitional transfers
may not be eliminated
Consolidation of financial statements of varying reporting dates will make
adjustment of significant cash transactions of entities after their reporting dates,
before the last reporting date
Difference will not be more than 3 months
Uniform accounting policies for like transactions, if not possible, disclose items to
which not applied
Consolidation Disclosures



listing of name, jurisdiction of significant controlled entities
reasons for not consolidating a controlled entity
apply the transitional provision as all transactions not eliminated

19. Foreign Currency
19

Transactions, burrowing/ repayment or purchasing goods and services in foreign currency,
recorded in an entity’s reporting currency at exchange rate as on date of the receipts and
payments

Cash receipts and cash payments of a foreign controlled entity at exchange rate on the date
of the receipts and payments

Cash balances held in a foreign currency should be reported using the closing rate (spot
exchange rate at the reporting date)

Unrealized gains and losses arising from changes in foreign currency exchange rates are not
cash receipts and payments

Exchange differences of two reporting dates, be disclosed while reconciling items between
opening and closing cash balances

Disclose the reasons, if reporting currency different from currency of the country

20. Budget Information in Financial
Statements
20
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
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Applies to all entities which present financial statements when approved budgets for
the entity, or components thereof, are made publicly available
Approved yearly or multi year budget by legislature or any Authority under law,
not estimates, forecasts or projections, will be presented
Initial budget may be final or it may be original, followed by supplementary
appropriations ( increase/ decrease in expenditures in certain sectors and increase
or decrease in revenue requiring tapping other sources of funding), reappropriations among different heads, requiring necessary approvals-leading to
final revised budget
One compiled budget for different activities of government or separate budget for
certain activities, (autonomous agencies, key programs) of government may be
published- recompiled budget for presentation in consolidated FS in later case
Actual/ budget out-turn is outcome of budget execution
Level of Aggregation

Detail budgets and actual are aggregated, to avoid information overload, following
classification of budget heads for presenting comparative statements at major head level
for the oversight of the higher authority/ legislature

21. Budget Information in Financial
Statements contd.
21

Comparison of Budget and Actual Amounts



As additional column in statement of cash, where the FS & budget are prepared on a comparable
basis (same accounting basis, accrual, cash or modified cash, same classification basis, same entity &
period); if not in separate statement titled comparison of budget & actual
compare original, revised & actual budgets on same comparable basis and calculate variance
(Variance of actual & original budget focuses on performance against original budget, Variance of
actual and final budget focuses on compliance with the final budget)
Disclosures



Disclosure of comparative information in respect of the previous period is not required as per this
Standard
Information about service achievements may be presented outside FS, cross reference in the FS will be
given (part 2)
explanation of whether changes between the original and final budget are a consequence of
reallocations within the budget, or of other factors




note disclosure in the financial statements, or, a separate report (management discussion and analysis or
similar report on operations or budget out-turn reports ) before preparation of FS with cross reference in
the note of FS
When the budget and financial statements are not prepared on a comparable basis, note to FS will
disclose the different basis used
in notes an explanation of material differences between the budget and actual amount as approved
guidance of the Authority, If the comparison is already done in FS documents, note will refer to that
Management discussion and analysis, operations review or other public reports which provide
commentary on the performance and achievements

22. BI in FS (Comparable Basis)
22

Accrual Budget and Cash FS


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

Budget reflects commitments to expend funds in the future and changes in those commitments, FS reflects
statement of cash
Budgets published on the “primary” or “non-market” functions of government, while FS report
on all activities controlled by a government, including the business activities of the government
statistical reporting model: general government sector may comprise national, state/provincial
and local governments– national government controlling others, One approved Budget and
one Consolidated FS
Budget may be biennial without separating yearly targets and achievement, FS may be
annual
Classification of Heads: FS - expenditures by economic nature (compensation of employees,
supplies and consumables, grants and transfers, etc) or function (health, education, etc); Budget
- by specific programs (poverty reduction or control of contagious diseases) or program
components linked to performance outcome objectives (students graduating from tertiary
education or surgical operations performed by hospital emergency services)
Reconciliation of Actual, when Budget and FS are not on comparable basis
Budget and actual comparison documents or Notes to FS shall reflect differences in basis and
reconciliation

23. Recipients of External Assistance
23
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

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Official Resources means all loans, grants, technical assistance, guarantees or other assistance provided or committed under a
binding agreement by multilateral or bilateral external assistance agencies or by a government, or agencies of a government,
other than to a recipient of the same nation
External Assistance (EA) means all official resources which the recipient can use or otherwise benefit from in pursuit of its
objectives
Assistance provided by non-governmental organizations (NGOs) shall not come under official resources, hence not under
External Assistance- however assistance provided by NGOs under binding agreement may be treated as External Assistance
if so approved by Authority
Mode of EA Payment as per agreement


Reimbursement to the Entity for payment to third party as per T&C

Payment to third party directly by EA Agency on clearance from Entity


Payment to the Entity upfront full/ in tranche as loan/ grant
Goods and Services in kind
Disclosures

total cash and by significant class & currency (part 2) of EA in cash - on the face of statement of cash

total EA and by significant class & currency (part 2) of EA paid by third parties to directly settle obligations of the entity
or purchase goods and services on behalf of the entity, when third party or the recipient inform that such payment has
been made, or entity has verified the payment - on the face of statement of cash or notes to FS



Third parties part of the Economic Entity (Treasury Single Account)
Third parties not part of Economic Entity
Loans & grants separately - on the face of statement of cash or notes to FS

24. Recipients of External Assistance contd.
24

EA to National Govt. on behalf of lower tier of govts.






National Govt. enter into external assistance agreements
National Govt. may re-lend or assign the funds to the other entity through back to back/
similar agreement
National Govt. may retain a small fee or interest to cover its administrative costs
National Govt. will recognize receipt and payment under appropriate classification
Netting of transactions where the terms and conditions are substantially the same may be
appropriate in the financial statements of the National Government
Undrawn EA




disclose in the notes to FS, balance of EA loans and grants available at reporting date
against each total, if specified in a binding agreement and the satisfaction of any
substantial T&C is highly likely, showing separately in the reporting currency
undrawn balances in a foreign currency, OB & CB at spot exchange rate and exchange
difference of two reporting date shall be disclosed
Agreement may not reflect fixed amount of assistance or T&C – no disclosure
Disclose significant T&C

25. Recipients of External Assistance contd.
25

Receipt of Goods or Services



Disclosure of Debt Rescheduled or Cancelled



Amount of EA debt rescheduled or cancelled shall be given in
notes to the FS
Any related T&C be given in notes to FS
Disclosure of Non Compliance with Significant T&C



Entity may opt to disclose the value of EA Goods & Service
Note to FS shall explain the basis of arriving at the value
Significant T&C of EA loan or grant agreements or guarantees
not complied leading to cancellation of EA
Amount of loan cancelled
Transitional provisions allow non-disclosure of certain
provisions for few years from adoption of this standard

26. CASH IPSAS PART 2
Encouraged Additional Disclosures

27. Going Concern
27



Disclosures under IPSAS Accrual Basis of Accounting
Assets used to generate Net cash inflows are defined as Future Economic
Benefits whereas assets used to deliver goods and services in accordance
with an entity’s objectives are defined as Service potential
Assessment of going concern


Take into account all available information for foreseeable future which is not
limited to 12 months from the approval of FS and consider potential
restructuring of organisation, estimates of receipts, financing & outflow.
Liquidity and solvency test appears unfavourable but other factors suggest it as
going concern.



(Government) The power to levy rates or taxes, even though their cash payments may
exceed their cash receipts for extended period
Prospect of stability & economic growth from a long time war ravaged nation
(Individual entity) Multi-year funding agreement with the government may show going
concern while cash flows for reporting period doesn’t favour.

28. Extraordinary Items; Administered
Transactions
28

Extraordinary Items




Rare & unusual events & transactions that are distinct from ordinary activities
Not included in budget as not expected to recur in the foreseeable future
Transaction & event is outside the control or influence of the entity
Vary in accordance with the entity’s operating environment & the level of government




natural (super cyclone) or man-made disaster (war, refugees influx) extraordinary
restructuring of activities may not be extra-ordinary
Disclosure may be made on the statement of cash or in FS
Administered Transactions


By an entity as agent on behalf of others where the amounts is not available for its own
use
Disclosure is useful for the assessment of entity’s activity and performance



Revenue collection: Department of taxation collects tax in its bank account on behalf of government
Pass through cash flow: Cash collected by one tier of govt. in its bank a/c before transferred to the
another tier of government (cash balances from this will be included on a net basis in statement of
cash).
Transfer Payments: When one tier of government places beneficiary fund (social security payments)
with lower tier of government for onward transmission; Cash balance held at the end of reporting
period reflected as closing balance for transfer in future.

29. Classes of Cash Flows; Related Party
29

Disclosure of major classes of Cash flows




Total cash payments and payments by third parties;
Classification based on either the nature of the payments or their function
Proceeds from borrowings; type and source of borrowings
Sub-classifications








Receipts from taxation
Receipts from fees, fines, penalties and licenses
Receipts from exchange transactions
The purposes for which external assistance grants and loans are provided
Receipts from other grants, transfers, or budget appropriations
Receipts from interest and dividends
Receipts from gifts and donations.
Related Party Disclosure

Related party transactions, including information about aggregate remuneration of key
management personnel in the notes to the FS (IPSAS 20)

30. Asset, Liabilities & Comparison with Budgets
30

Assets and Liabilities

Classifications:

Assets as receivables, investments or property plant and equipment; and


Liabilities as payables, borrowings by type or source and other liabilities.
If the entity doesn’t make publicly available its approved budget , a comparison in note to FS

of actual with the budgeted amount for the reporting period, where the FS and the budget are on the
same basis of accounting



with separate columns for budgeted amounts and actual amounts
Disclosure that the budgeted amounts have not been exceeded
Cross reference to the document (information on service achievements) in FS to link budget &
actual data to non financial budget data and service achievement.

Entities which adopt multi-period budgets to provide additional note about the relationship
between budget and actual amounts during the budget period

31. Consolidated Financial Statement; Acquisitions &
Disposals of Controlled Entities; Joint Ventures(JV)
31

Consolidated Financial Statement

Ownership held

The proportion of ownership (in the form of shares/ voting power) in control entities

The controlling entity holds an ownership interest and/or voting rights of 50%/less

Any entity (not controlled ) in which more than 50% of ownership interest is held


Controlling entity, which does not present a consolidated statement of cash receipts and payments, to disclose the reasons
why the consolidated financial statements have not been presented together with the bases on which controlled entities
are accounted for


Method used to account for the controlled entities, in the Controlling entity’s separate FS
Name of Authority of its controlling entity, if any, that publishes consolidated financial statements
Acquisitions & Disposals of controlled entities and other operating units

Cash flows from acquisition & disposal of controlled entities & other operating units are presented separately



Portion of the purchase/disposal consideration discharged by means of cash


Total purchase/disposal consideration (Cash /other asset)
Amount of cash in the controlled entity/operating units acquired/disposed of
Assets & liabilities excluding cash of a controlled entity/operating unit acquired / disposed of by each major categories
Joint Ventures(JV)

Public sector entities establish joint venture to undertake certain activities ranging from commercial undertaking to
provision of community services at no charge

Entities report on cash basis will report as

Cash payment/ receipt in acquisition/ disposal of an interest in JV or ongoing operations of JV

32. Control on Another Entity for Reporting
32

Establishing Control

Power element (the power to govern the financial & operating policies of another entity)


Ability to veto operating & capital budgets; governing body decisions

Entity’s power to control the financial & operating policies of another entity but doesn’t necessarily require
to exercise the power (Government department’s ownership interest in a railway authority)


Appoint / remove a majority of members of the governing body
The entity has (directly/ indirectly through controlled entity) ownership of a majority voting interest
Benefit element


Dissolve and obtain a significant level of residual economic benefit of the other entity

Extract distributions of assets , and/or may be liable for certain obligations of the other entity


Controlled Entity participating in achieving its objectives


Distribution of its surpluses (such as dividend) and is exposed to the risk of a potential loss
Controlled Entity economically dependent on controlling entity
Certain GBEs may be controlled entities under IPSAS
Regulatory Power

Government entities regulate many entities by their sovereign & legislative power and
doesn’t include control of financial reporting (i.e. a pollution control authority can regulate
the operation of the entities)

33. Financial Reporting in
Hyperinflationary Economies
33

Financial reporting in hyperinflationary Economy: cumulative inflation in 3 yrs 100%







Restate its statement of cash and other FS in current rate of currency at the reporting date
Restate the comparative information for the previous period
Use a general price index that reflects changes in general purchasing power
Identity and level of the price index at the reporting date and the movement in the index
during the current and the previous reporting period
Disclose that above measures are followed
Restatement of the budgetary information where the public sector include the related
budgetary information in their FS
Consolidated Financial Statement(CFS)



FS of a controlled entity will be restated by applying general price index in the currency
of the country it reports before included in the CFS when the statement of cash & other FS
are prepared on consistent basis
If controlled entity is a foreign controlled entity, its restated FS are translated at closing
rate
All items (non-monetary/monetary) require to be restated into the measuring unit current
at the date of CFS if FS with different reporting dates are consolidated

34. Qualitative Characteristics of Financial
Reporting
34

Understandability


Information is understandable when users expect to comprehend its meaning
Relevance



information can be used in evaluating past, present & future event
Reliability
Free from material error & bias and can be depended on by users






Comparability



Faithful representation( presented with the substance of the transaction)
Substance over form ( presented with their substance & economic reality)
Neutrality( free from bias)
Prudence ( degree of caution in making the estimates under uncertainty)
Completeness ( complete in accordance with materiality & cost
Comparison of FS of different entities
Comparison of the FS of the same entity over period of time
Constraints on relevant & reliable information



Timeliness (if reporting is comprehensive, but delayed, may be reliable but not relevant)
Balance between Benefits & Cost of providing it
Balance between qualitative characteristics (to achieve the objective of FS)

35. External Assistance (EA)
35




Assistance from NGOs disclosed to the extent possible
Purpose for which EA received/ paid, Loan & Grants wise
Amount received classification and provider wise
Undrawn external assistance









Loan/ grant, amount by each provider and class wise
Planned use of each class of undrawn fund
Currency in which is held & will be made available
Change in the amount of each class during the period
T&C of EA agreement which determine /limit the use of/affect access to, external assistance
Outstanding balance of loan payment (closing rate where future debt service payments
denominated in foreign currency) including those guaranteed by third parties along with T&C,
Disclosure of T&C and consequence of non compliance of loan, grants or guarantees
Summary of the repayment with T&C
Value of external assistance received as goods & services

36. MIGRATE TO ACCRUAL
ACCOUNTING
Encouraged Additional Disclosures

37. Intending to Migrate to Accrual Basis
of Accounting
37



Statement of Cash Receipts & Payments as “cash flow
statement” in IPSAS 2
Major classes of gross cash receipts and gross cash
payments from operating, investing and financing activities,
except to the extent allowed on net basis as per IPSAS
Scope of Consolidated Statements-Exclusions from the
Economic Entity


An entity won’t consolidate accounts of entity with temporary
control as the controlled entity is acquired & held for disposal in
near future
Entities need to be aware of the difference in consolidation
requirements of accrual and cash basis IPSAS

38. Chidananda Jena
Email: chidananda.jena@gmail.com; Skype/ YM: chidanandajena
Phone: +88 01789 409432; +91