2IFCP
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What is IPSAS? 
 
During the last two decades the International Public Sector Accounting Standards Board (IPSASB) and the IPSAS that it establishes has increasingly become a point for international standardisation and reference within the area of public sector accounting. The IPSASB is, today, an independent standard-setting board under the auspices of the International Federation of Accountants (IFAC).  
IFAC is an international organization, a private standard-setting organization, for the accounting profession that was established back in 1977. The original constitution of the IFAC presented stated that the role of the IFAC was the development and enhancement of a co-ordinated worldwide accounting profession with harmonized standards. IFAC and its standard-setting boards is becoming an increasingly integral player in global financial governance processes. 
 
Since 2004 the IPSASB has been operating as an independent standard-setting board that dedicates its work to developing high-quality International Public Sector Accounting Standards (IPSASs), guidance papers, and other resources for the use by public sector entities around the world for general purpose financial reporting.  
In 2011, the terms of reference of the IPSASB were expanded. The IPSASB was, as of November 2011, not only to set standards for the general purpose financial statements, but also to work towards strengthening general purpose financial reports (GPFRs). GPFRs denotes all financial reports that are intended to meet the information needs of users who are unable to require the preparation of financial reports and is thus designed to meet their specific information needs. The role of the IPSASB today embraces that of developing and issuing, in the public interest and under its own authority, high-quality accounting standards and other publications for use by public sector entities across the globe in the preparation of GPFRs. 
 
“The IPSASB’s objective is to serve the public interest by developing high-quality accounting standards and other publications for use by public sector entities around the world in the preparation of general purpose financial reports.  
This is intended to enhance the quality and transparency of public sector financial reporting by providing better information for public sector financial management and decision making. In pursuit of this objective, the IPSASB supports the convergence of international and national public sector accounting standards and the convergence of accounting and statistical bases of financial reporting where appropriate; and also promotes the acceptance of its standards and other publications.” (http://www.ifac.org/public-sector/about-ipsasb/terms-reference). 
 
 
 
List and brief description of IPSASs 
IPSAS 1 Presentation of Financial Statements sets out the overall considerations for the presentation of financial statements, guidance for their structure and minimum requirements for the content of financial statements prepared under the accrual basis of accounting.  
 
IPSAS 2 Cash Flow Statements requires the provision of information about the changes in cash and cash equivalents during the financial period from operating, investing and financing activities.  
 
IPSAS 3 Accounting Policies, Changes in Accounting Estimates and Errors specifies the accounting treatment for changes in accounting estimates, changes in accounting policies and the correction of material errors. 
 
IPSAS 4 The Effects of Changes in Foreign Exchange Rates deals with accounting for foreign currency transactions and foreign operations, sets out the requirements for determining which exchange rate to use for the recognition of certain transactions and balances, and prescribes how to recognize the financial effect of changes in exchange rates within the financial statements.  
 
IPSAS 5 Borrowing Costs prescribes the accounting treatment for borrowing costs and requires either the immediate expensing of borrowing costs or, as an allowed alternative treatment, the capitalization of borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. 
 
IPSAS 6 Consolidated and Separate Financial Statements requires all controlling entities to prepare consolidated financial statements, which consolidate all controlled entities on a line-by-line basis.  
 
IPSAS 7 Investments in Associates requires all such investments to be accounted for in the consolidated financial statements using the equity method of accounting. 
 
IPSAS 8 Interests in Joint Ventures requires proportionate consolidation to be adopted as the benchmark treatment, and the equity method of accounting as an allowed alternative to account for joint ventures. 
 
IPSAS 9 Revenue from Exchange Transactions establishes the conditions for the recognition of revenue arising from exchange transactions, and requires such revenue to be measured at the fair value of the consideration received or receivable.  
 
IPSAS 10 Financial Reporting in Hyperinflationary Economies describes the characteristics of a hyperinflationary economy and requires financial statements of entities that operate in such economies to be restated so that the financial information provided is meaningful. 
 
IPSAS 11 Construction Contracts defines construction contracts and establishes requirements for the recognition of revenues and expenses arising from such contracts. 
 
IPSAS 12 Inventories