Magazine article Public Finance

Standard Issued but Far from Set

Magazine article Public Finance

Standard Issued but Far from Set

Article excerpt

An international accounting standard has been released for consultation after almost 16 years of preparation but - in a first - an alternative view is included.

The International Public Sector Accounting Standards Board released its social benefits accounting standard on 31 October.

It has been working on the standard since 2002 but publication was delayed because board members could not agree on the model.

The IPSASB as a whole decided to finally publish the standard - which aims to improve consistency, transparency and reporting by governments of social benefit schemes such as retirement, unemployment and disability - although it had not reached a consensus. An alternative view, prepared by three dissenting board members, was published within it.

IPSASB principal Paul Mason told PF that an alternative view on a proposed standard is unusual for the board. However, he said this reflected the complexity and diversity of social benefits.

"There's a whole range of benefits you're trying to cover in a single set of principles, and that makes it complex," he said.

The draft presents a set of standards with a single "recognition point" - when an individual becomes eligible for benefits.

In the alternative view, the way pensions are accounted for would be similar to the way employee pensions recognise liability of individuals - typically from when they start working.

Because social benefits are so diverse, ranging from long-term pensions to short-term job seeker's allowance, the impact of the two approaches could also be very different, Mason explained. …

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