I guess somebody has to kick off discussion also in this section of the board.
In the attempt to answer the headline "Are accounting, recording and reporting adequate?", IPSASB published a consultation paper about "Reporting on the Long-Term Substainability of Public Finances" (
http://www.ifac.org/Guidance/EXD-Details.php?EDID=0133). Although the comment period ended more than a month ago, I think it might be interesting the hear some additonal comments or to get different views from a different audience.
In the consultation paper IPSASB expresses the view that information on long-term sustainability of public finances is necessary to meet the objectives of financial reporting by public sector entities. However, the current financial statements do not usually provide such information. A recent seminar at OECD revealed that, although most OECD members prepare such information, it is not usually included in general purpose financial reporting. More likely, it is submitted to organizations such as the EC based on specific requirements. IPSASB is of the view that such information should be made publically available as a part of general purpose financial reporting, even if this goes beyond what traditional financial statements present.
More specifically, IPSASB proposes that mainly information on the most relevant challenges, which often are health or age related schemes, is prepared and that additional disclosure is given about critical assumptions, such as interest or growth rates applied. IPSASB proposes such information to be presented regularly, but not necessarily on an annual basis.
Many comments, which are available through the same link, are very supportive. Other commentators, however, are of the view that IPSASB goes beyond traditional boundaries of accounting and reporting. Some also fear that such information may be difficult to audit. Now this is not is obviously not the place to give a detailed analysis of all responses. Such an analysis is currently prepared.
I would rather encourage to discuss
i. experiences with the presentation of long-term sustainabilty information in various countries;
ii. whether or not such information should become part of general purpose financial reporting;
iii. whether there are any issues not yet identified in the consultation paper.
Just as a disclosure: I'm chair of IPSASB. But please feel free to share any views, including questions of understanding and critical comments. I do think that the dialogue in such forums ultimately improves decision making.
