ICAS response: Recognition and measurement of social benefits

ICAS has responded to the IPSASB's consultation on 'Recognition and Measurement of Social Benefits'

29 January 2016

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Key messages

We agree that there is a gap in international public sector accounting standards for transactions which involve social benefits and welcome IPSASB’s efforts to take this project forward to help strengthen the reporting of financial position in government financial statements.

A principles based approach is essential given the myriad nature of social benefit schemes and legal frameworks. It is also the corner stone of high quality accounting standards. We would therefore welcome greater clarity of the principles underpinning a standard on social benefits.

These could include the following:

  • Supporting simpler, transparent and meaningful information for readers
  • Proper application of materiality
  • Alignment with IFRS principles, avoiding unnecessary specialism and new definitions; only diverging from IFRS where there is a clear, justifiable need of a uniquely public sector matter that is material, adversely impacts the true and fair view and is not covered by IFRS

The application of a social benefits standard sits best at national, i.e. whole of government accounts level, not below. We suggest that this is clarified going forward.

The implications for going concern are material. These will also need to be considered and justified. Governments with credit ratings, access to capital markets and tax raising powers should be able to demonstrate a form of either going concern or pending default. We believe it is important that each country explains clearly and succinctly in its Strategic Report (or equivalent high level narrative commentary preceding the financial statements) what its obligations are and how it intends to fund them as they fall due. How these liabilities have been treated in the financial statements also needs to be clearly referenced and explained in the accounting policies.

We would add that accruals accounting is only part of the overall picture. Financial planning and sustainability reporting should also be given greater priority.

Discussion is still at a conceptual stage and we would welcome further information and examples to inform an impact assessment and support informed discussion on the potential consequences of different options for practical implementation.


  • Consultations and responses
  • Public sector

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