MAJOR DIFFERENCES

BETWEEN
IPSAS/PPSAS & IFRS

MAJOR DIFFERENCE BETWEEN

IPSAS & IFRS
Revenue
Public sector entities may derive revenues from
exchange or non-exchange transactions.
IPSAS 23 on revenue from non-exchange transactions
serves to accommodate transactions in which public
sector entities receive taxes and transfers (cash or
non-cash) without directly giving approximately equal
value in exchange, or giving value to another entity
without directly receiving approximately equal value
in exchange.

MAJOR DIFFERENCE BETWEEN

IPSAS & IFRS
Revenue
Exchange transactions, on the other hand, are
transactions in which one entity receives assets or
services, or has liabilities extinguished, and directly
gives approximately equal value (primarily in the
form of cash, goods, services, or use of assets) to
another entity in exchange (see IPSAS 9).
For public sector entities the distinction between nonexchange and exchange transactions is often
necessitated as these entities will often have a
combination of both types of revenue transactions.

MAJOR DIFFERENCE BETWEEN

IPSAS & IFRS
Revenue
IPSAS 23 calls for public sector entities to analyse the
inflow of resources and states that the entity can
recognize an asset arising from a non-exchange
transaction when it gains control of resources that
meet the definition of an asset and satisfy the
recognition criteria.

MAJOR DIFFERENCE BETWEEN

IPSAS & IFRS
Presentation of budget information in financial
statements
IPSAS 24 on the presentation of budget information
in financial statements requires a comparison
between the budgeted amount and the actual
amounts arising from execution of the budget to be
included in the financial statements of public sector
entities which are required to, or choose to, make
publicly available the approved budget for which they
are held publicly accountable.

MAJOR DIFFERENCE BETWEEN

IPSAS & IFRS
Presentation of budget information in financial
statements
IPSAS 24 requires that public sector entities
reporting under IPSAS disclose an explanation of any
material differences between the budget and actual
amounts. Applying IPSAS 24 shall strengthen
transparency and comparability between budget and
actual amounts as reporting in the financial
statements.

MAJOR DIFFERENCE BETWEEN

IPSAS & IFRS
Disclosure of financial information
IPSAS 22 on the disclosure of financial information about
the general government sector establishes requirements
for preparing and presenting information about the
general government sector (GGS).
The standard is only applied to a governments
consolidated financial statements.
Information disclosed in accordance with this standard
disaggregates those consolidated financial statements
according to the GGS boundaries as specified in
statistical bases of financial reporting. The standard does
not permit reporting entities to consolidate information
about entities that are not subject to common control

MAJOR DIFFERENCE BETWEEN

IPSAS & IFRS
Income taxes.
Public sector entities are assumed to be generally
exempt from income taxes; thus, International
Accounting Standards (IAS) 12, Income Taxes, has no
equivalent in IPSAS. However, the latter provides
that if the public sector entity is liable for tax (which
is considered an unlikely event), the entity can refer
to the guidance in IAS 12 in accounting for the tax.

MAJOR DIFFERENCE BETWEEN

IPSAS & IFRS
Control
IFRS 10, Consolidated Financial Statements; IFRS 11,
Joint Arrangements; and IFRS 12, Disclosures of
Interests in Other Entities, took effect in 2013.
However, IPSAS is still based on the previous
standards of IAS 27, Consolidated and Separate
Financial Statements; IAS 28, Investments in
Associates; and IAS 31, Interest in Joint Ventures.
The definition of control under IFRS 10 is very
different from the one in IAS 27; thus, the manner of
determining control may be different for a profitoriented entity applying IFRS from that of a public
sector entity applying IPSAS.

MAJOR DIFFERENCE BETWEEN

IPSAS & IFRS

Service Potential as a recognition criterion is

another point of difference between IFRS and IPSAS.
This concept is not referred to in the IFRS, which
considers economic benefit as a major recognition
criterion. The service potential concept is
incorporated in the definition of the public sector
entitys assets, liabilities, income and expenses and is
an indicator of an assets capacity to provide goods
and services to the public, in accordance with the
entitys mandate.

MAJOR DIFFERENCE BETWEEN

IPSAS & IFRS
Impairment of non-cash-generating assets
The accounting for impairment of non-cashgenerating assets under IPSAS is also different as
there are no equivalent transactions under IFRS.
IPSAS also caters for both impairment of cash and
non-cash generating assets. IFRS assumes that all
assets will be cash-generating.
IPSAS, on the other hand, assumes that the majority
of a public sector entitys assets can be non-cash
generating. IPSAS 21 Impairment of Non-cashgenerating Assets provides specific guidance on how
to determine the value-in-use of such assets.

MAJOR DIFFERENCE BETWEEN

IPSAS & IFRS
Share-based payments
IPSAS eliminated the concepts that are considered
peculiar in the private sector, such as accounting for
share-based payments and the requirement to
disclose earnings per share. In cases that such
concepts are applicable to the public sector entities,
these entities should refer to the relevant IFRS