MAJOR DIFFERENCESBETWEEN IPSAS/PPSAS & IFRS MAJOR DIFFERENCE BETWEEN IPSAS & IFRS Revenue Public sector entities may derive revenues from exchange or non-exchange transactions. or giving value to another entity without directly receiving approximately equal value in exchange. . IPSAS 23 on revenue from non-exchange transactions serves to accommodate transactions in which public sector entities receive taxes and transfers (cash or non-cash) without directly giving approximately equal value in exchange. or use of assets) to another entity in exchange (see IPSAS 9). goods. services. or has liabilities extinguished. For public sector entities the distinction between nonexchange and exchange transactions is often necessitated as these entities will often have a combination of both types of revenue transactions. and directly gives approximately equal value (primarily in the form of cash. on the other hand. .MAJOR DIFFERENCE BETWEEN IPSAS & IFRS Revenue Exchange transactions. are transactions in which one entity receives assets or services. .MAJOR DIFFERENCE BETWEEN IPSAS & IFRS Revenue IPSAS 23 calls for public sector entities to analyse the inflow of resources and states that the entity can recognize an asset arising from a non-exchange transaction when it gains control of resources that meet the definition of an asset and satisfy the recognition criteria. MAJOR DIFFERENCE BETWEEN IPSAS & IFRS Presentation of budget information in financial statements IPSAS 24 on the presentation of budget information in financial statements requires a comparison between the budgeted amount and the actual amounts arising from execution of the budget to be included in the financial statements of public sector entities which are required to. . make publicly available the approved budget for which they are held publicly accountable. or choose to. .MAJOR DIFFERENCE BETWEEN IPSAS & IFRS Presentation of budget information in financial statements IPSAS 24 requires that public sector entities reporting under IPSAS disclose an explanation of any material differences between the budget and actual amounts. Applying IPSAS 24 shall strengthen transparency and comparability between budget and actual amounts as reporting in the financial statements. The standard is only applied to a government’s consolidated financial statements. The standard does not permit reporting entities to consolidate information about entities that are not subject to common control .MAJOR DIFFERENCE BETWEEN IPSAS & IFRS Disclosure of financial information IPSAS 22 on the disclosure of financial information about the general government sector establishes requirements for preparing and presenting information about the general government sector (GGS). Information disclosed in accordance with this standard disaggregates those consolidated financial statements according to the GGS boundaries as specified in statistical bases of financial reporting. the entity can refer to the guidance in IAS 12 in accounting for the tax.MAJOR DIFFERENCE BETWEEN IPSAS & IFRS Income taxes. the latter provides that if the public sector entity is liable for tax (which is considered an unlikely event). However. has no equivalent in IPSAS. . thus. Income Taxes. Public sector entities are assumed to be generally exempt from income taxes. International Accounting Standards (IAS) 12. Joint Arrangements. and IFRS 12. Interest in Joint Ventures. Consolidated Financial Statements. Disclosures of Interests in Other Entities. . The definition of control under IFRS 10 is very different from the one in IAS 27. IFRS 11.MAJOR DIFFERENCE BETWEEN IPSAS & IFRS Control IFRS 10. IPSAS is still based on the previous standards of IAS 27. Investments in Associates. Consolidated and Separate Financial Statements. IAS 28. However. took effect in 2013. the manner of determining control may be different for a profitoriented entity applying IFRS from that of a public sector entity applying IPSAS. and IAS 31. thus. This concept is not referred to in the IFRS. . income and expenses and is an indicator of an asset’s capacity to provide goods and services to the public. The service potential concept is incorporated in the definition of the public sector entity’s assets. in accordance with the entity’s mandate. which considers “economic benefit” as a major recognition criterion. liabilities.MAJOR DIFFERENCE BETWEEN IPSAS & IFRS Service Potential as a recognition criterion is another point of difference between IFRS and IPSAS. MAJOR DIFFERENCE BETWEEN IPSAS & IFRS Impairment of non-cash-generating assets The accounting for impairment of non-cashgenerating assets under IPSAS is also different as there are no equivalent transactions under IFRS. IPSAS 21 Impairment of Non-cashgenerating Assets provides specific guidance on how to determine the value-in-use of such assets. on the other hand. IPSAS also caters for both impairment of cash and non-cash generating assets. assumes that the majority of a public sector entity’s assets can be non-cash generating. IPSAS. IFRS assumes that all assets will be cash-generating. . In cases that such concepts are applicable to the public sector entities.MAJOR DIFFERENCE BETWEEN IPSAS & IFRS Share-based payments IPSAS eliminated the concepts that are considered peculiar in the private sector. these entities should refer to the relevant IFRS . such as accounting for share-based payments and the requirement to disclose earnings per share.