Agenda Item 3: Update of IPSASs 6 to 8 Joanne Scott IPSASB Meeting - - PowerPoint PPT Presentation

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Agenda Item 3: Update of IPSASs 6 to 8 Joanne Scott IPSASB Meeting - - PowerPoint PPT Presentation

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Agenda Item 3: Update of IPSASs 6 to 8 Joanne Scott IPSASB Meeting September 16-19, 2013 Toronto, Canada Page 1 | Confidential and Proprietary Information Agenda item 3 Objectives of Agenda Item Consider and resolve remaining issues

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Page 1 | Confidential and Proprietary Information

Agenda Item 3: Update of IPSASs 6 to 8

Joanne Scott IPSASB Meeting September 16-19, 2013 Toronto, Canada

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Objectives of Agenda Item

  • Consider and resolve remaining issues

(agenda item 3.1)

  • Consider and approve EDs

(agenda items 3.2 to 3.6)

  • Note update on related IASB projects

(agenda item 3.1)

Agenda item 3

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Process

Agenda item 3

IPSAS 6 IPSAS 7 IPSAS 8 GFSM

IFRS 10 IFRS 11 IFRS 12 IAS 27 (revised) IAS 28 (revised) ED 48 ED 49 ED 50 ED 51 ED 52

Identify key public sector issues Modify IFRSs Seek feedback on proposals

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Current IPSASs EDs IPSAS 6 Consolidated and Separate Financial Statements ED 48 Consolidated Financial Statements ED 51 Separate Financial Statements IPSAS 7 Investments in Associates ED 52 Investments in Associates and Joint Ventures IPSAS 8 Investments in Joint Ventures ED 49 Joint Arrangements ED 50 Disclosure of Interests in Other Entities

Links between current IPSASs and EDs

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Accounting for investment entities

Agenda item 3.1

Public sector entity (not an investment entity) Controlled Investment Entity Investments, including controlled entities

How to account for controlled investment entities?

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Accounting for investment entities

Options for accounting for a controlled investment entity by an entity that is not itself an investment entity

  • Option 1 Consolidate controlled investment entity
  • Option 2 Fair value controlled investment entity
  • Option 3 Fair value the investments of a controlled investment entity

and consolidate the remainder of a controlled investment entity

Agenda item 3.1

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Accounting for investment entities

Recommendations

  • NOTE arguments made by IASB respondents ….
  • AGREE that the practical difficulties that influenced the IASB decision

are not expected to be as prevalent in the public sector

  • AGREE
  • Roll up the exception to consolidation to the controlling entity
  • Require that the controlling entity measure the investment entity at fair value

through surplus or deficit in the consolidated financial statements (being Option 2)

Agenda item 3.1, paragraphs 71-72

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General drafting issues (all EDs)

Recommendations

  • AGREE to use the full title of Standards throughout the EDs
  • NOTE that the transitional provisions in the proposed Standards are

relevant for entities that are already applying IPSASs

Agenda item 3.1

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ED 48, Consolidated Financial Statements

Page by page review Recommendations

  • NOTE the changes since the ED was last considered
  • AGREE to issue ED 48, Consolidated Financial Statements
  • AGREE the Specific Matters for Comment
  • AGREE comments requested by 31 January 2014

Agenda items 3.2 (and 3.7)

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ED 48, Consolidated Financial Statements

Changes since ED 48 was last considered

  • Accounting by an investment entity (decided in June 2013)
  • Accounting for controlled investment entities by an entity that is not

itself an investment entity (to be decided this meeting)

  • Specific Matters for Comment added (all EDs)
  • BC completed (all EDs)

Agenda items 3.2 (and 3.7)

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ED 48, Consolidated Financial Statements

Specific Matter for Comment 1:

  • Do you agree with the proposed definition of control? If not, how would

you change the definition? Specific Matter for Comment 2:

  • Do you agree that a controlling entity should consolidate all controlled

entities (except in the circumstances proposed in this ED)? If you consider that certain categories of entities should not be consolidated, please justify your proposal having regard to user needs and indicate your preferred accounting treatment for any such controlled entities. If you have any comments about temporarily controlled entities, please respond to Specific Matter for Comment 3.

Agenda items 3.2 (and 3.7)

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ED 48, Consolidated Financial Statements

Specific Matter for Comment 3:

  • Do you agree with the proposal to withdraw the current exemption in

IPSAS 6, Consolidated and Separate Financial Statements for temporarily controlled entities? If you agree with the withdrawal of the exemption please give reasons. If you disagree with the withdrawal of the exemption please indicate any modifications that you would propose to the current exemption in IPSAS 6.

Agenda items 3.2 (and 3.7)

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ED 48, Consolidated Financial Statements

Specific Matter for Comment 4:

  • Do you agree that a controlling entity that meets the definition of an

investment entity should be required to account for its investments at fair value through surplus or deficit? Specific Matter for Comment 5:

  • Do you agree that a non-investment entity that controls an investment

entity should be required to account for that investment entity at fair value through surplus or deficit?

Agenda items 3.2 (and 3.7)

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ED 49, Joint Arrangements

Page by page review Recommendations

  • NOTE the changes since the ED was last considered
  • AGREE to issue ED 49, Joint Arrangements
  • AGREE the Specific Matters for Comment
  • AGREE comments requested by 31 January 2014

Agenda items 3.3 (and 3.8)

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ED 49, Joint Arrangements

Changes since ED 49 was last considered

  • Description of binding arrangements modified (decided in June 2013)

– a binding arrangement, as referred to in the definition of joint control, describes an arrangement that confers enforceable rights and obligations on the parties to it as if it were in the form of a

  • contract. It includes rights from contracts or other legal rights.

Agenda items 3.3 (and 3.8)

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ED 49, Joint Arrangements

Specific Matter for Comment 1:

  • Do you agree that joint arrangements should be classified as joint

ventures or joint operations based on whether an entity has (i) rights to assets and obligations for liabilities, or (ii) rights to net assets? Specific Matter for Comment 2:

  • Do you agree that joint ventures should be accounted for in

consolidated financial statements using the equity method?

Agenda items 3.3 (and 3.8)

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ED 50, Disclosure of Interests in Other Entities

Page by page review Recommendations

  • NOTE the changes since the ED was last considered
  • AGREE to issue ED 50, Disclosure of Interests in Other Entities
  • AGREE the Specific Matters for Comment
  • AGREE comments requested by 31 January 2014

Agenda items 3.4 (and 3.9)

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ED 50, Disclosure of Interests in Other Entities

Changes since ED 50 was last considered

  • Structured entity changes (decided March 2013)

– definition modified – application guidance modified

  • Proposes disclosures by a non-investment controlling entity about

unconsolidated controlled investment entities

(Subject to IPSASB’s decisions about accounting for investment entities)

Agenda items 3.4 (and 3.9)

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ED 50, Disclosure of Interests in Other Entities

Specific Matter for Comment 1:

  • Do you agree with the proposal that entities for which administrative

arrangements or statutory provisions are dominant factors in determining control of the entity are not structured entities? If not, please explain why and explain how you would identify entities in respect of which the structured entity disclosures would be appropriate.

Agenda items 3.4 (and 3.9)

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ED 51, Separate Financial Statements

Page by page review Recommendations

  • NOTE the changes since the ED was last considered
  • AGREE to issue ED 51, Separate Financial Statements
  • AGREE the Specific Matters for Comment
  • AGREE comments requested by 31 January 2014

Agenda items 3.5 (and 3.10)

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ED 51, Separate Financial Statements

Changes since ED 51 was last considered

(all decided in March 2013)

  • Equity method reinstated
  • Permit carrying amount (of certain financial assets) to be used as

initial cost when there are no published price quotations

  • Acknowledge that an entity may not have recognized goodwill in

relation to an associate or joint venture

  • Align uniform reporting date requirements with ED 48

Agenda items 3.5 (and 3.10)

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ED 51, Separate Financial Statements

Specific Matter for Comment 1:

  • Do you agree with the proposal to continue to permit the use of the

equity method in separate financial statements?

Agenda items 3.5 (and 3.10)

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ED 52, Investments in Associates and Joint Ventures

Page by page review Recommendations

  • NOTE the changes since the ED was last considered
  • AGREE to issue ED 52, Investments in Associates and Joint Ventures
  • AGREE the Specific Matters for Comment
  • AGREE comments requested by 31 January 2014

Agenda items 3.6 (and 3.11)

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ED 52, Investments in Associates and Joint Ventures

Changes since ED 52 was last considered

  • IASB ED 2012/3 Equity Method: Share of Other Net Asset Changes

– IPSASB agreed (March 2013) to include proposals in IASB ED – Outcome of IASB project uncertain – Proposals not included in ED 52

Agenda items 3.6 (and 3.11)

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ED 52, Investments in Associates and Joint Ventures

Specific Matter for Comment 1:

  • Do you agree with the proposal to require the use of the equity method

to account for investments in joint ventures? If not, please provide reasons and indicate your preferred treatment?

Agenda items 3.6 (and 3.11)