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Independent financial reporting standards for governments issued Back  
The International Federation of Accountants has issued the first eight international public sector accounting standards (IPSASs) designed to enhance the accountability and financial management of governments worldwide.

The standards cover the presentation of financial statements, cash flow statements, the disclosure of extraordinary items in arriving at net surpluses or deficits, the effects of changes in foreign exchange rates and consolidation of controlled entities on a line by line basis.

The standard on borrowing costs prescribes the immediate expensing of borrowing costs, or alternatively, the capitalisation of borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset.

The IFAC public sector committtee recognised that many governments may not yet be in a position to adopt the accrual-based IPSASs. To assist, IFAC has developed a exposure draft, ‘Financial Reporting under the Cash Basis of Accounting’, which it hopes will lead to transparency where governments remain on a cash basis of accounting.

The IPSASs are based on international accounting standards. IFAC says that the release of the new standards means that ‘for the first time, there is an authoritative set of independent financial reporting standards for governments’.

Irish government accounts are prepared on a cash basis presently, but are moving to an accruals basis in accordance with EU standards.

IFAC is the worldwide organisation for hte accountancy profession with 143 professional accountancy bodies as members, representing over two million accountants in 104 countries.

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