IPSAS Training Manual 2024

IPSAS Training Manual 2024

Page 1 - Introductory slide:

  • Author: Jerome Amuzu-Sefordzi Jnr, Head, Central Government Accounts, National Accounts Directorate.
  • Year: O National Accounts Directorate-CAGD, 2024

Page 2 - Outline of Presentation:

  • Training objectives
  • Expected outcomes
  • Introduction to IPSAS, Definitions and concepts
  • Practical application of IPSAS, Applicable IPSAS
  • Link to Government of Ghana (GoG) Accounting Policies
  • Q & A

Page 3 - Training Objectives:

  • Build technical knowledge of CAGD staff in IPSAS interpretation and application.
  • Promote consistent IPSAS application across MDAs, MMDAs, and SOEs.
  • Strengthen connection between IPSAS, PFM Act, and regulations.
  • Equip participants to prepare IPSAS-compliant Entity Financial Statements and Whole-of-Government Financial Statements (WOGFS).

Page 4 - Expected Outcomes:

  • Participants will be able to:
    1. Explain Ghana’s IPSAS adoption rationale.
    2. Identify and interpret key IPSAS standards.
    3. Apply IPSAS principles to financial reporting.
    4. Recognize and measure public sector transactions per IPSAS.
    5. Address implementation challenges.

Page 5 - Introduction:

  • Manual guides application of accrual basis IPSAS for Covered Entities in Ghana.
  • IPSAS provides a consistent framework for reporting financial performance, position, and cash flows.
  • Importance of IPSAS: provides relevant, reliable, comparable, and understandable financial information.
    • Relevant Information: Useful for decision-makers.
    • Reliable Information: Free from material misstatements.
    • Comparability: Enables meaningful cross-entity comparisons.
    • Understandability: Clearly presented financial statements.

Page 6 - Benefits of IPSAS:

  1. Increased Accountability and Transparency: Accrual-based accounting recognizes income/expenses when they occur, offering a more accurate financial view and enhancing public trust.
  2. Improved Financial Management: Facilitates better resource allocation, efficient spending tracking, and enhanced internal controls.
  3. Enhanced Access to Capital: Improves credit rating, lowers borrowing costs, and attracts investors.
  4. Global Integration and Compliance: Supports standardization of public sector financial reporting worldwide, advocated by international organizations.

Page 8 - Practical Understanding of IPSAS and Their Application:

  • Presented by CONTROLLER GENERAL ACCOUNTANT.

Page 9 - Applicable IPSAS List:

  1. IPSAS 1: Presentation of Financial Statements
  2. IPSAS 2: Cash Flow Statements
  3. IPSAS 3: Accounting Policies, Changes in Accounting Estimates and Errors
  4. IPSAS 4: The Effects of Changes in Foreign Exchange Rates
  5. IPSAS 5: Borrowing Costs
  6. IPSAS 9: Revenue from Exchange Transactions
  7. IPSAS 10: Financial Reporting in Hyperinflationary Economies
  8. IPSAS 11: Construction Contracts
  9. IPSAS 12: Inventories
  10. IPSAS 13: Leases
  11. IPSAS 14: Events After the Reporting Date
  12. IPSAS 16: Investment Property
  13. IPSAS 17: Property, Plant and Equipment
  14. IPSAS 18: Segment Reporting
  15. IPSAS 19: Provisions, Contingent Liabilities and Contingent Assets
  16. IPSAS 20: Related Party Disclosures
  17. IPSAS 21: Impairment of Non-Cash Generating Assets
  18. IPSAS 22: Disclosure of Financial Information about the General Government Sector
  19. IPSAS 23: Revenue from Non-Exchange Transactions (Taxes and Transfers)
  20. IPSAS 24: Presentation of Budget Information in Financial Statements
  21. IPSAS 26: Impairment of Cash-Generating Assets
  22. IPSAS 39: Employee Benefits
  23. IPSAS 27: Agriculture
  24. IPSAS 28: Financial Instruments Presentation

Page 11 - Definitions of Key Concepts:

  1. Accounting Basis: Methods to recognize transactions (Cash vs. Accrual Bases).
  2. Accounting Measurement: Computing financial data in monetary terms.
  3. Accounting Recognition: Incorporating items meeting accounting criteria into financial statements.
  4. Accounting Disclosure: Making relevant entity information accessible.
  5. Accounting Presentation: How financial statements are displayed.
  6. Accounting Classification: Grouping transactions for financial statement preparation.

Page 14 - IPSAS 1: Presentation of Financial Statements

  • Objective: Establishes presentation standards for general purpose financial statements for comparability.
  • Defines components: Statement of Financial Position, Statement of Financial Performance, Statement of Changes in Net Assets/Equity, Cash Flow Statement, Notes to Financial Statements, Comparative information, Budget vs Actual figures.

Page 16 - Statement of Financial Position:

  • Classifies Current vs Non-current Assets/Liabilities.

Page 19 - Statement of Financial Performance:

  • Minimum line items: Revenue, Expenses categorized by nature, allocations for non-controlling interests.

Page 22 - Statement of Changes in Net Assets/Equity:

  • Shows Surplus/Deficit for the period and Revenues/Expenses directly in equity.

Page 24 - Cash Flow Statement:

  • Provides information on cash generation and usage.

Page 25 - Notes & Disclosures:

  • Presents basis of preparation, accounting policies, and significant policies.

Page 28 - IPSAS 2: Cash Flow Statement

  • Objective: Identify sources & uses of cash flows.
  • Categories: Operating Activities, Investing Activities, Financing Activities.

Page 30 - Operating Activities:

  • Includes cash receipts from taxes and cash payments for social benefits, suppliers, etc.

Page 32 - Investing Activities:

  • Cash flows related to acquisition and sale of long-term assets.

Page 34 - Financing Activities:

  • Involves cash flow from issuing shares and paying off debts.

Page 40 - IPSAS 3: Accounting Policies, Changes in Accounting Estimates and Errors

  • Establishes criteria for recognizing and changing accounting policies.
  • Accounting Policies: Principles guiding financial statement preparation.

Page 42 - Changes in Accounting Estimates:

  • Adjustments from new information.
  • Prior Period Errors: Incorrect information from earlier reporting periods requiring correction.

Page 44 - Reporting Changes in Accounting Policies:

  • Applied retrospectively unless impracticable.

Page 50 - IPSAS 4: Effects of Changes in Foreign Exchange Rates

  • Deals with foreign currency handling in financial statements.

Page 54 - IPSAS 5: Borrowing Costs

  • Guidance on recognizing and measuring borrowing costs.
  • Recognition: Generally requires immediate expensing unless capitalized.

Page 69 - IPSAS 9: Revenue from Exchange Transactions

  • Criteria for recognizing revenue from exchange transactions.

Page 82 - IPSAS 23: Revenue from Non-Exchange Transactions

  • Governs recognition of revenue distinct from exchange transactions.

Page 95 - IPSAS 24: Presentation of Budget Information

  • Requires comparison between budgeted and actual amounts in financial statements.

Page 100 - IPSAS 27: Agriculture

  • Accounting for biological assets and agricultural produce.

Page 138 - IPSAS 31: Intangible Assets

  • Specifies treatment for intangible assets not covered by other standards.

Page 156 - IPSAS 39: Employee Benefits

  • Recognition and disclosure requirements for employee benefits.

Page 176 - IPSAS 40: Public Sector Combinations

  • Principles for accounting for public sector combinations.

Page 238 - IPSAS 38: Disclosure of Interests in Other Entities

  • Disclosure requirements for interests in subsidiaries, joint ventures, and associates.

Page 268 - IPSAS 41: Financial Instruments

  • Principles for financial reporting of financial assets and liabilities.