The trend in recent years has been a shift in focus for National, States, Local governments and related entities to evolve a Financial Reporting framework which fulfils the accounting, auditing and financial reporting needs of all stakeholders to the resources. The key objective of this change is ensure Transparency of government transactions, Comparability financial reporting captions and Uniformity of reporting by government entities.
International Public Sector Accounting Standards (IPSAS) are a set of accounting standards issued by the IPSAS Board for use by public sector entities around the world in the preparation of financial statements. These standards are based on International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and sufficiently detail accounting standards for application by national governments, regional (e.g., state, provincial, territorial) governments, local (e.g., city, town) governments, related governmental entities (e.g., agencies, boards and commissions) and , intergovernmental organizations.
IPSAS do not apply to Government Business Enterprises such as NNPC, PHCN, etc. IPSAS is a catalyst for providing high-quality transparent financial statements and, more importantly, enabling sound public-finance management and improving operational performance.
Accordingly, the Federal Executive Council (FEC) at its meeting of 28th July, 2010 approved that Nigeria should join the comity of nations in adopting the provisions of the International Accounting Standards for the Private and Public Sectors in line with the transformation agenda of the government of the country. In line with this mandate, the Federation Account Allocation Committee (FAAC) at its meeting on 13th June, 2011 set up a Sub-Committee to provide a Roadmap for the Adoption of the International Public Sector Accounting Standards (IPSAS) in the three tiers of government in Nigeria.
As part of the implementation plan, the Sub-Committee has set a two (2) – prong deadline approach for the adoption of IPSAS: January 2014 for the adoption of Cash-Basis IPSAS and January 2016 for the adoption of full Accrual IPSAS.
IPSAS implementation is a journey which includes a number of steps and activities that facilitate full adoption. Based on the roadmap designed by FAAC IPSAS Committee, cash basis adoption effort should be fully concluded by the end of 2014 while States financial reports for 2015 should be IPSAS-compliant.
At PAACO-PCL Consortium, we assist clients in walking through the length and breadth of the journey, ensuring a seamless transition from the current framework to the new standard. The next slides present our insights on IPSAS, the myths, our suit of services, methodology and our rich experiences.
