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Attachment 4.5 Accounting Policies Usually Addressed in Transition
Contents of this Attachment:
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
General Accounting Policies
Assets
Liabilities
Revenue
Expenses
Equity/Net Worth
Other Accounting Policies
Other Disclosures and Presentations
Reporting on Operational Performance
I. GENERAL ACCOUNTING POLICIES
Statement of Entities to Which the Policies Apply
Definition of Reporting Entity
– Consolidation of Controlled Entities
– Combination of Associates
– Joint Ventures
Entity Reporting Period
Accrual Basis Used by Entity
Going Concern Assumption
Measurement Basis Used by Entity
Application of “Materiality“1
Explanation of Changes in Entity’s Accounting Policies
II. ASSETS
Definition and Recognition Criteria Used for Assets
Classifications Used within the Financial Statements
Cash and Cash Equivalents
Accounts Receivable and Accrued Revenues (by type)
Bad Debts and Doubtful Accounts
Inventories (by type)
Prepayments
Investments (by type)
Investment Property
Property, Plant and Equipment (by type)
Leased Assets/Sale and Leaseback Transactions
Information Technology Assets (Hardware and Software)
Intangible Assets
Biological Assets
Heritage Assets
”Information is material if its omission or misstatement could influence the decisions or assessments of users made on the
basis of the financial statements. Materiality depends on the nature or size of the item or error judged in the particular
circumstances of omission or misstatement.” – Glossary of Defined Terms: IPSAS 1 to IPSAS 20, IFAC Public Sector
Committee.
1
Adapted primarily from Transition to the Accrual Basis of Accounting: Guidance for Governments and Government
Entities, Study 14, IFAC Public Sector Committee, April 2002.
1
Attachment 4.5 Accounting Policies Usually Addressed in Transition
III. LIABILITIES
Definition and Recognition Criteria Used for Liabilities
Classifications to be used within the financial statements
Accounts Payable and Accrued Expenses (by type including transfers/grants payable)
Finance Lease Liabilities
Provisions for Employee Entitlements
Other Provisions
Pension Liability
Borrowings
Bonds/Stock
Unearned Revenue
Currency Issued
Social Policy Obligations (by type)
IV. REVENUE
Definition and Recognition Criteria used for Revenues
Classifications to be used within the financial statements
Application of classification system to all revenues
Recognition of Investment Revenue (by type, for example interest and dividend/distribution
revenue)
Recognition of Revenue from the Provision of Goods and Services (by type, examples listed)
Output revenue (under a purchaser/provider model)
User charges (exchange only)
Trading revenue
Certain government grants
Property rental
Recognition of Types of Non-Exchange Revenue (by type, examples listed)
- Taxes
- Levies
- Fines
- Certain government grants
- Donations
Other Revenue
Surplus or Loss on Construction Contracts
Lease Revenue (operating and finance types)
V. EXPENSES
Definition and Recognition Criteria used for Expenses
Classifications to be used within the financial statements
Application of classification system to all expenses
Employee Expenses (inc luding contributions to superannuation schemes)
Supplies and Consumables
Depreciation
Amortization of Intangible Assets
Transfer Payments/Grants and Donations (by type)
Interest and Financing
Income Tax/Income Tax Equivalents (where appropriate)
VI. EQUITY/NET WORTH/NET ASSETS
Definition of Equity/Net Worth
Composition of Equity/Net Worth
Contributed Capital
Accumulated Surplus and Deficit
Asset Revaluation Reserve
Foreign Currency Reserve
VII. OTHER ACCOUNTING POLICIES
General Presentation and Disclosure Policies
Treatment of Extraordinary Items
Treatment of Fundamental Errors
Recognition of Gains and Losses on Disposal of Non-Current Assets
Treatment of Transfers of Assets and Liabilities
Disclosure of Commitments
Contingent Liabilities Definition and Recognition Criteria
Contingent Assets
Treatment of Events After the Reporting Date
Related Party Disclosures
Treatment of Foreign Currency Denominated Items
Applicability (and Treatment) of Accounting for Hyperinflation
VIII. OTHER DISCLOSURES AND PRESENTATIONS
Adapted primarily from Transition to the Accrual Basis of Accounting: Guidance for Governments and Government
Entities, Study 14, IFAC Public Sector Committee, April 2002.
2
Attachment 4.5 Accounting Policies Usually Addressed in Transition
Cost Accounting Policies
Comparative Data Presentation
Presentation of Budget Reporting
Non-Financial Reporting (Performance ratios, operational and demographic statistics, etc.)
IX. REPORTING ON OPERATIONAL PERFORMANCE
Measures of efforts (Inputs)
Measures of accomplishments
• Outputs measures
• Outcomes measures
Measures that relate efforts to accomplishments
• Efficiency measures
• Cost−outcome measures
Adapted primarily from Transition to the Accrual Basis of Accounting: Guidance for Governments and Government
Entities, Study 14, IFAC Public Sector Committee, April 2002.
3