Separate financial statements (ED 48)

Comments from ACCA to the International Public Sector Accounting Standards Board (IPSASB)  
17 February 2014




Overall, we are highly supportive of the work of the IPSASB and developments in international public sector accounting standards. We believe that the proposed standard for separate financial statements has practical use for prescribing the accounting and disclosure requirements for investments when a public sector entity prepares separate financial statements.

Specific comments

Do you agree generally with the proposals for separate financial statements?  In particular, do you agree with the proposal to permit the use of the equity method in addition to cost and fair value, for investments in other entities?

We agree with the proposals set out in ED 48. We understand the rationale for the proposal to allow the use of the equity method, particularly as a number of countries continue to use this established method of accounting for certain investments in the public sector. We agree with the supporting rationale that investments in most cases are used to enable service provision rather than for investment purposes, and there are likely to be a higher proportion of investments in the public sector for which there are no active markets and in respect of which fair values are not readily observable.