IPSASB plans to focus on natural resources accounting questioned

3 Apr 18

Attendees at an IPSASB roundtable in Brussels questioned the addition of accounting for natural resources as a priority for the standard setter’s work from 2019 to 2023.

Jens Heiling, senior manager at EY Financial Accounting Advisory Services in Germany, and participant at the roundtable last week, told PF International after the event he did not believe accounting for natural resources was a “European priority”.

“In terms of the IPSAS project priorities, I would say that from a European perspective a project on natural resources has probably not the highest priority,” he said.

IPSASB has set out its for the period of 2019-2023, including upcoming projects for the standard setting board, such as accounting for natural resources, discount rates and differential reporting.

John Stanford, technical director of IPSASB, told PF International that, if the natural resource project was chosen, it would take a lot of careful research.

The project would set out how to account for natural resources in the public sector, something that the work plan said was “prevalent in many jurisdictions”.

Stanford explained: “If we were to include this project in our work plan, it would be important to have a detailed research phase before initiating the development of a consultation paper - and subsequently an exposure draft of a pronouncement.”

Board members and delegates at the roundtable did agree that other regions, especially countries more reliant on natural resources than Europe, do consider accounting for natural resources a priority for the board.

The board told PF International the outcome of the second and third roundtable events, in Ethiopia and the Philippines, might take a different view. 

Ian Carruthers, chair of IPSASB, told PF International: “The debate we had over our proposed project on natural resources illustrates the challenges involved for a global standards board in meeting a diverse range of stakeholder needs.”

An attendee told PF international at the event that it is important to consider what should be defined as natural resources, as it is often a general European perception that it does not impact the region.

Several participants questioned whether natural resources should also include water and air, for example, which will have impact on Europe. 

There was strong support at the event for the overall strategic objective and themes in the work plan, including for the adoption, implementation and broader use of accrual information for public financial management. 

IPSASB held their first of three roundtable events in Brussels last week to get views and thoughts on their proposed Strategy and Work Plan for 2019-2023. 

The roundtable attendees included professionals from the European Commission, the European Court of Auditors, the African Union, academics and accountants.

It was hosted at the office of Accountancy Europe in Brussels.

The second and third roundtable events will take place in Addis Ababa, Ethiopia and Manila, the Philippines, respectively, to get a more global input.

The board said that they are looking forward to hearing the thoughts on this project in other parts of the world.

IPSASB is receiving comments on the plan until 15 June and a final version is expected in December.

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