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NBAA IPSAS TRAINING

Challenges in IPSAS Implementation -

Usage of Template
A template is intended to assist the
preparer and that not every item will be
applicable to every entity.
There was a mere reproduction of
accounting policies irrespective of whether
they were relevant for specific entities or
not.
E.g. notes borrowing costs, business
combinations, goodwill, associates, and
joint ventures for Regional Secretariats,
ministries, and some LGAs

Usage of Template
Items with no entries for the current and
comparative year are shown as dashes instead of
omitting them completely. It implies most are merely
filling in a pre-deigned template without due care
of relating events to the LGAs operations.

Accounting Policies/Notes
Format
Statement of compliance with IPSAS
Summary of significant accounting policies
applied.
Supporting information for items presented on
the face of statement of financial position,
statement of financial performance statement
of change in net assets/equity and statement
of cash flow.

Other
disclosures
Contingent
contractual
commitment,
on
information

Liabilities,
financial

Accounting Policies/Notes
Accounting policies for most MDAs are based on cash
basis IPSAS part 2 instead Accrual based IPSASs.
Totals in the schedules do not match with figures
appearing in main Financial Statements particularly in
relation to PPE, deferred revenue and capital
balances.
No adjustments in the statement of budget Vs actual
relating to balances as per financial statements to
actual payment or receipts.

Consolidation of FS
Preparation of consolidated FS of
entities that they control under
their ministries.
Some MDAs have even disclosed
controlled
entities
with
shareholding proportions.

IPSAS 1
The ranges of financial statements were not being
indicated in the sets of FS.
i.e. FS are covered from pages . to
IPSAS 1 encourages production of additional
information but should be excluded being part of FS
Name of an entity has to appear on every page of
the FS in several FSs - names LGAs/MDs were
missing.
Sequencing of notes numbers was inconsistent
CG majority did not start with note number1. In
the Statement of Financial Position notes start with
no. 49

IPSAS 9 and 23 Revenue from exchange


and Non-exchange Transactions. For
MDAs

Revenue according to the two standards should be


categorized into exchange and non-exchange transaction
with details given in the notes.
Statement of financial performance refers to exchequer
revenue to all MDAs which is not in line with the standard.
All exchequer should be reflected to deferred income
(revenue and capital) and latter for revenue expenditure
based on actual expenditure it should be transferred to nonexchange transaction and of a capital nature based on
depreciation should go to non-exchange transaction.

IPSAS 13 Leases
Some LGAs/MDA have property/equipment which
are rented or hired out or themselves are renting their
office accommodations.
Review of their FS indicate no disclosures according
to this standard i.e. less than 1 year, 1 5 years and
beyond 5 years.
All LGAs/MDAs have accounting policy statements
relating to lease transactions as lessees or lessors.
There is neither disclosure of whether the leases are
operating or finance leases.

IPSAS 17 - PPE
Reliefs adopted require following additional
disclosures para 104:
Information on the major classes of asset that
have not been recognized.
for a second or subsequent reporting period,
details of the assets or classes of asset that
were not recognized at the previous reporting
date but that are now recognized.

IPSAS 17 - PPE
Misstatement of the figure relating to PPE,
Combining land and building
Depreciating land and building

Non inclusion of PPE acquired at non


exchange transactions

IPSAS 19 Provisions, Contingent


Liabilities and Contingent Assets

LGAs owe substantial amount in respect of services and entitlement from


various parties e.g. teachers rights, medical staff etc. the level of provisions
do not seem to reflect these liabilities. These parties have a first call to their
employers who are LGAs.
Amount unpaid at year end seem to be booked by creating cash deposit
and credit side reflecting Deposit General as payable, instead of charging
to expenditure item and crediting accrual/payable account. The deposit
system is not proper.
The following have not been disclosed:
Contingent liabilities

Capital Commitments

Accounting for Government


Grants
IAS
20
IPSAS does not have specific standard dealing with Government Grants
instead IAS 20 is used.

Notes involved are:


Note on deferred recurrent Grant & Note on deferred capital grant.
Basis for amortization is not provided and generally figures do not tally on the
movement schedule and the charge to the statement of financial
performance.
Basis for amortization of capital grant should be based on depreciation
charge. Amortization charge to statement of financial performance can not
be traced to PPE schedule.

Details of grants received is not disclosed in the schedule.

IPSAS 24 Presentation of Budget


Information in Financial
Statements
Original budget and final budget there are big differences which
are not explained.
Actual amounts and final budget differences are material - are
not explained.

Most do not adjust for accrued/prepayments to get cash


revenue during the year since budget figures are on cash basis.
Revenue side items not adjusted include:
Amortized revenue/capital grants,
Gain/loss in disposal of PPE or foreign exchange

Inclusion of non-cash payment items into statement of budget vs


actual. Items like depreciation, impairment, amortizations and
provisions are included in the statement.

IPSAS 20 Related Party Disclosures


Three disclosures are required:
Disclosure of control para 25 - Related
party relationships where control exists shall
be disclosed, irrespective of whether there
have been transactions between the
related parties.
No information is given relating to
relationships with holding Ministries, and
within
Ministries
were
they
receive
resources.
Disclosures limited only Key management
personnel remuneration ---Composition and
numbers involved not disclosed
Loans and advances not disclosed.

IPSAS 29 & 30 Financial Instruments


Recognition and Measurement:

Financial instruments are not classified into the


four classes as per standard even though
Accounting Policies mentions about the four
categories.
FVTPL
HTM
L &R

AFS
Risk disclosures relating to liquidity, credit, and
market risks not made at all for receivables,
investments, deposits and payables.

Conclusion
Disclose accounting policies applicable to
your entity.

Use IPSAS disclosure checklist


compliance with IPSAS.

to

check

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