Follow Us

Follow us on Twitter  Follow us on LinkedIn
 

26 November 2009

IPSASB consults on reporting on the long-term sustainability of public finances


The consultation seeks views on how information on the long-term sustainability of government programmes may complement information available in traditional financial statements, thereby increasing transparency and enhancing accountability and decision making.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has just published a Consultation Paper,Reporting on the Long-Term Fiscal Sustainability of Public Finances.

It seeks views on how information on the long-term sustainability of government programmes, increasingly available in many jurisdictions, may complement information available in traditional financial statements, thereby increasing transparency and enhancing accountability and decision making.

Long-term fiscal sustainability information for national governments has the potential to enhance both the historically based information provided in the traditional general purpose financial statements (GPFSs) and the additional information provided in general purpose financial reports (GPFRs). The IPSASB has therefore concluded that the presentation of information on long-term fiscal sustainability is necessary to meet the accountability and decision-making objectives of financial reporting.
 
Long-term fiscal sustainability information could be presented in a number of ways in GPFRs, whether prepared on an accrual basis or a cash basis. In the long term, the IPSASB considers that the presentation of additional statements in GPFRs providing details of projections on future government spending and receipts may be the best way of satisfying users’ needs. In many jurisdictions developing such statements would take some time. In the interim, therefore, the discussion of long-term fiscal sustainability issues and indicators as part of narrative reporting is a more realistic approach. Although this Consultation Paper focuses mainly on reporting by national governments, the IPSASB believes that simpler forms of long-term fiscal sustainability reporting are also appropriate for the consolidated reports presented at sub-national levels.
 
It is particularly important to disclose the basis of preparation and the key principles and methodologies underlying projections of inflows and outflows. Such disclosures are likely to include:
 
(a) The main demographic and economic assumptions;
 
(b) The sensitivity to changes in these key assumptions; and
 
(c) The extent to which the approach to modelling projections for age-related and non-age related programmes differ.
 
Deadline for comments is 30 April 2010


© IFAC


< Next Previous >
Key
 Hover over the blue highlighted text to view the acronym meaning
Hover over these icons for more information



Add new comment