First time Adoption of Accrual Basis International Public ...

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January 2015

October 2011

Comments due: February 29, 2012

IPSAS 33

International Public Sector Accounting StandardTM

First-time Adoption of Accrual Basis International Public Sector Accounting Standards (IPSASs)

This document was developed and approved by the International Public Sector Accounting Standards Board? (IPSASB?). The objective of the IPSASB is to serve the public interest by setting high-quality public sector accounting standards and by facilitating the adoption and implementation of these, thereby enhancing the quality and consistency of practice throughout the world and strengthening the transparency and accountability of public sector finances. In meeting this objective the IPSASB sets International Public Sector Accounting StandardsTM (IPSASTM) and Recommended Practice Guidelines (RPGs) for use by public sector entities, including national, regional, and local governments, and related governmental agencies. IPSAS relate to the general purpose financial statements (financial statements) and are authoritative. RPGs are pronouncements that provide guidance on good practice in preparing general purpose financial reports (GPFRs) that are not financial statements. Unlike IPSAS RPGs do not establish requirements. Currently all pronouncements relating to GPFRs that are not financial statements are RPGs. RPGs do not provide guidance on the level of assurance (if any) to which information should be subjected.

The structures and processes that support the operations of the IPSASB? are facilitated by the International Federation of Accountants? (IFAC?). Copyright ? January 2015 by the International Federation of Accountants? (IFAC?). For copyright, trademark, and permissions information, please see page 113.

IPSAS 33 --FIRST-TIME ADOPTION OF ACCRUAL BASIS INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS

(IPSASs)

CONTENTS

Paragraph

Objective ...............................................................................................................................

1

Scope ....................................................................................................................................

2?8

Definitions..............................................................................................................................

9?14

Date of Adoption of IPSASs .........................................................................................

10

First IPSAS Financial Statements ................................................................................

11

Previous Basis of Accounting.......................................................................................

12

Transitional IPSAS Financial Statements ....................................................................

13?14

Recognition and Measurement .............................................................................................

15?22

Accounting Policies ......................................................................................................

15

Exceptions to the Retrospective Application of IPSASs .......................................................

16?22

Fair Presentation and Compliance with IPSASs...................................................................

23?26

Exemptions that Affect Fair Presentation and Compliance with Accrual Basis IPSASs During the Period of Transition .............................................................................................

33?62

Three Year Transitional Relief Period for the Recognition and/or Measurement of Assets and/or Liabilities................................................................................................

36?62

Exemptions that Do Not Affect Fair Presentation and Compliance with Accrual Basis IPSASs During the Period of Adoption .................................................................................

63?134

Using Deemed Cost to Measure Assets and/or Liabilities ...........................................

64?70

Using Deemed Cost to Measure Assets Acquired Through a Non-Exchange Transaction

71

Using Deemed Cost for Investments in Controlled Entities, Joint Ventures and Associates (IPSAS 34) ................................................................................................

72?73

Date at which Deemed Cost can be Determined .........................................................

74?76

IPSAS 1, Presentation of Financial Statements...........................................................

77?84

IPSAS 4, The Effects of Changes in Foreign Exchange Rates ...................................

85?87

IPSAS 5, Borrowing Costs ...........................................................................................

88?90

IPSAS 10, Financial Reporting in Hyperinflationary Economies..................................

91?94

IPSAS 13, Leases ........................................................................................................

95?96

IPSAS 18, Segment Reporting.....................................................................................

97

IPSAS 21, Impairment of Non-Cash-Generating Assets .............................................

98?100

FIRST-TIME ADOPTION OF ACCRUAL BASIS IPSASS

IPSAS 25, Employee Benefits...................................................................................... IPSAS 26, Impairment of Cash-Generating Assets ..................................................... IPSAS 28, Financial Instruments: Presentation ........................................................... IPSAS 29, Financial Instruments: Recognition and Measurement .............................. IPSAS 30, Financial Instruments: Disclosures............................................................. IPSAS 31, Intangible Assets ........................................................................................ IPSAS 32, Service Concession Arrangements ............................................................ IPSAS 34, Separate Financial Statements, IPSAS 35, Consolidated Financial Statements and IPSAS 36, Investments in Associates and Joint Ventures ................. IPSAS 35, Consolidated Financial Statements ............................................................ IPSAS 37, Joint Arrangements..................................................................................... Disclosures ............................................................................................................................ Explanation of Transition to IPSASs............................................................................. Reconciliations ............................................................................................................. Disclosures where Deemed Cost is Used for Inventory, Investment Property, Property, Plant and Equipment, Intangible Assets, Financial Instruments or Service Concession Assets ....................................................................................................... Disclosures Where Deemed Cost is Used for Investments in Controlled Entities, Joint Ventures or Associates ........................................................................................ Exemptions from Disclosure Requirements in IPSASs During the Period of Transition Transitional Provisions .......................................................................................................... Effective Date ........................................................................................................................ Appendix A Basis for Conclusions Implementation Guidance

101?107 108?110 111?112 113?122 123?124 125?126 127?128

129?130 131

132?134 135-152

141 142-147

148

149?150 151?152

153 154

International Public Sector Accounting Standard 33, First-time Adoption of Accrual Basis International Public Sector Accounting Standards (IPSASs) is set out in paragraphs 1?154. All the paragraphs have equal authority. IPSAS 33 should be read in the context of its objective, the Basis for Conclusions, and the Preface to International Public Sector Accounting Standards. IPSAS 3, Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies in the absence of explicit guidance.

4

FIRST-TIME ADOPTION OF ACCRUAL BASIS IPSASS

Objective

1. The objective of this Standard 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:

(a) That provides transparent reporting about a first-time adopter's transition to accrual basis IPSASs;

(b) 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

(c) Where the benefits are expected to exceed the costs.

Scope

2. An entity shall apply this IPSAS when it prepares and presents its annual financial statements on the adoption of, and during the transition to, accrual basis IPSASs.

3. This IPSAS applies when an entity first adopts accrual basis IPSASs and during the transitional period allowed in this IPSAS. It does not apply when, for example, a first-time adopter:

(a) Stops presenting financial statements in accordance with prescribed requirements, having previously presented them as well as another set of financial statements that contained an explicit and unreserved statement of compliance with accrual basis IPSASs;

(b) Presented financial statements in the previous reporting period in accordance with prescribed requirements and those financial statements contained an explicit and unreserved statement of compliance with accrual basis IPSASs; or

(c) Presented financial statements in the previous reporting period that contained an explicit and unreserved statement of compliance with accrual basis IPSASs, even if the auditors modified their audit report on those financial statements.

4. This Standard shall be applied from the date on which a first-time adopter adopts accrual basis IPSASs and during the period of transition. This Standard permits a first-time adopter to apply transitional exemptions and provisions that may impact fair presentation. Where these transitional exemptions and provisions are applied, a first-time adopter is required to disclose information about the transitional exemptions and provisions adopted, and progress towards fair presentation and compliance with accrual basis IPSASs.

5. At the end of the transitional period a first-time adopter must comply with the recognition, measurement, presentation and disclosure requirements in the other accrual basis IPSAS in order to assert compliance with accrual basis IPSASs as required in IPSAS 1, Presentation of Financial Statements.

6. This IPSAS does not apply to changes in accounting policies made by an entity that already applies IPSASs. Such changes are the subject of:

(a) Requirements on changes in accounting policies in IPSAS 3, Accounting Policies, Changes in Accounting Estimates and Errors; and

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