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Overview

IPSAS 24 has no equivalent counterpart under IAS/IFRS.


IPSAS 24 Presentation of Budget Information in Financial Statements applies to government entities that are required are elect to present budget information in their financial statements. The standard requires to make a comparison and to provide explanations for material differences between approved budget and actual information. Compliance with the requirements of the standard ensures that public sector entities discharge their accountability obligations and enhance the transparency of their financial statements by demonstrating compliance with the approved budget for which they are held publicly accountable and, where the budget and the financial statements are prepared on the same basis, their financial performance in achieving the budgeted results


IPSAS 24 was issued in December 2006 and applies to annual periods beginning on or after 1 January 2009.



History of IPSAS 24







Effective date

Annual periods beginning on or after 1 January 2009.


Full text

Refer to IFAC website here


Summary of IPSAS 24 Presentation of Budget Information in Financial Statements


Objective

Compliance with the stipulations of IPSAS 24 ensures that public sector entities discharge their accountability obligations and enhance the transparency of their financial statements by demonstrating compliance with the approved budget for which they are held publicly accountable and, where the budget and the financial statements are prepared on the same basis, their financial performance in achieving the budgeted results [IPSAS 24.1].


Scope

This standard applies to entities that prepare and present financial statements under the accrual basis of accounting [IPSAS 24.2]. IPSAS 24 applies to all public sector entities other than GBEs [IPSAS 24.3]. The standard applies to entities that are required or elect to make publicly available approved budgets for which they are held publicly accountable [IPSAS 24.1].


Key definitions [IPSAS 24.7]

Original budget: the initial approved budget for the budget period.

Approved budget: the expenditure authority derived from laws, appropriation bills, government ordinances, and other decisions related to the anticipated revenue or receipts for the budgetary period.

Final budget: the original budget adjusted for all reserves, carry-over amounts, transfers, allocations, supplemental appropriations, and other authorized legislative, or similar authority changes applicable to the budget period.


Comparison of Budget and Actual Amounts

A comparison of the budget amounts and the actual amounts should be presented either as [IPSAS 24.14]:

• a separate additional financial statement or

• as additional budget columns in the financial statements currently presented in accordance with IPSAS

Presentation of the comparison as additional budget columns in the primary financial statements only when the financial statements and the budget are prepared on a comparable basis [IPSAS 24.21].

An entity shall present the comparison of budget and actual amounts separately for each level of legislative oversight [IPSAS 24.14]:

• The original and final budget amounts;

• The actual amounts on a comparable basis; and

• By way of note disclosure, an explanation of material differences between the budget and actual amounts, unless such explanation is included in other public documents issued in conjunction with the financial statements and a cross reference to those documents is made in the notes.


Changes between the original and the final budget

An explanation should be presented of whether changes between the original and final budget are a consequence of reallocations within the budget, or of other factors [IPSAS 24.29]:

• By way of note disclosure in the financial statements; or

• In a report issued before, at the same time as, or in conjunction with the financial statements, and shall include a cross reference to the report in the notes to the financial statements.


Comparability

All comparisons of budget and actual amounts should be presented on a comparable basis to the budget [IPSAS 24.31].


Disclosures of budgetary basis, period and scope

The notes to the financial statements should include details about

• the budgetary basis and classification basis adopted in the approved budget [IPSAS 24.39]

• the period of the approved budget [IPSAS 24.43] and

• the entities included in the approved budget [IPSAS 24.45].


Reconciliation of actual amounts on a comparable basis with actual in the financial statements

If the financial statements and the budget are not prepared on a comparable basis, actual amounts that are presented on a comparable basis to the budget should be reconciled to the following actual amounts presented in the financial statements, identifying separately any basis, timing and entity differences [IPSAS 24.47]:

• If the accrual basis is adopted for the budget

o total revenues

o total expenses

o net cash flows from operating activities

o net cash flows from investing activities

o net cash flows from financing activities

• If a basis other than the accrual basis is adopted for the budget

o net cash flows from operating activities

o net cash flows from investing activities

o net cash flows from financing activities.


The reconciliation should be disclosed on the face of the statement of comparison of budget and actual amounts or in the notes to the financial statements.


Comparative information for the previous period is not required [IPSAS 24.54].

December 2006

Issuance of IPSAS 24: Presentation of Budget Information in Financial Statements

1 January 2009

Effective date of IPSAS 24

IPSAS 24 Presentation of Budget Information in  Financial Statements