The International Public Sector Accounting Standards Board (IPSASB) has released for comment Exposure Draft (ED) 56, The Applicability of IPSAS, in an attempt to improve the interpretation of government business enterprises (GBE) and make it easier to determine whether organisations actually meet the criteria under the public sector accounting rules
This decision to release an ED follows concerns from stakeholders and preparers about the application of IPSASs to public sector entities.
Currently, each IPSAS includes a statement that it does not apply to government business enterprises (GBEs), which are expected to be commercially-oriented public sector entities. The term ‘government business enterprise’ is defined in IPSAS 1, Presentation of Financial Statements.
However, the IPSASB said that a wide range of entities are described as GBEs, but some of these entities clearly do not meet the definition of a GBE. In other cases, there are different interpretations of the GBE definition.
ED 56 proposes to:
- Revise the preface to IPSAS to provide the characteristics of public sector entities for which IPSASs are intended;
- Delete the definition of government business enterprises (GBEs) in IPSAS 1, Presentation of Financial Statements; and
- Amend the scope section of each IPSAS and recommended practice guideline (RPG) by removing the paragraph that states that these pronouncements do not apply to GBEs.
The comment period closes on 30 November 2015.
The exposure draft is available here