Social welfare is a key area of work for governments, who are generally responsible for delivering social benefits to citizens in need. These benefits also represent a large proportion of government expenditures (cash transfers) and can take the form of state pensions, unemployment benefits or other social and income support measures, all of which are within the scope of the new accounting standard.

So why is this standard necessary? IPSAS 42’s origins stem from the need to provide transparency around the nature and financial effects of social benefit schemes, and to better understand how these schemes impact the government’s finances as a whole.