IPSASB updates revenue transaction and transfer expense standards

June 5, 2023

The board’s updated standards, which include three pronouncements, are applicable from 1 January 2026.

The International Public Sector Accounting Standards Board (IPSASB) has issued three pronouncements that update and simplify existing principles, according to a news release. Informed by stakeholder feedback and refinement over the course of several years, the pronouncements introduce:

1. A single, up-to-date source of guidance applicable to all revenue transactions across the public sector; and
2. A new straightforward accounting model for the recognition and measurement of transfer expenses in the public sector.
3. IPSAS 47 replaces IPSAS 9, Revenue from Exchange Transactions; IPSAS 11, Construction Contracts; and IPSAS 23, Revenue from Non-Exchange Transactions with two accounting models for the recognition and measurement of public sector revenue transactions, based on the existence of a binding arrangement, the release said.

IPSAS 48 introduces guidance for transfer expenses, where a transfer provider provides resources to another entity without receiving anything directly in return, which is a common situation in the public sector globally, the release said.

"The updates to chapter five of the conceptual framework revise the definitions of an asset and a liability and add new guidance on the transfer of resources, unit of account, and binding arrangements that are equally unperformed," the release said. "These changes provide a strong foundation for the guidance in the new standards."

The effective date for IPSAS 47 and IPSAS 48 is 1 January 2026, with earlier application permitted. Updates to the conceptual framework are effective when published.

[Financial Management Magazine]