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11 Mar. 2020

IPSASB Exposure Drafts: Revenue and Transfer Expenses for public sector entities

The International Public Sector Accounting Standards Board (IPSASB) has recently issued three Exposure Drafts proposing new recognition and measurement requirements for revenue transactions and transfer expenses. Comments are due to the IPSASB by 15 September 2020.

The Exposure Drafts are:

• IPSASB ED 70 Revenue with Performance Obligations, which applies to enforceable (binding) arrangements with performance obligations, applying the five-step public sector performance obligation approach;
• IPSASB ED 71 Revenue without Performance Obligations, which proposes accounting for other enforceable and non-enforceable arrangements. It proposes that some transactions could have present obligations for the resource recipient (and would require a liability to be recognised) even if there are no performance obligations (eg a grant to pay specified salaries); and
• IPSASB ED 72 Transfer Expenses, which proposes recognition and measurement requirements by the resource provider for transactions with or without performance obligations for the resource recipients (excluding Social Benefits). The resource provider provides goods, services or other assets without directly receiving any good, service or other asset in return.

The IPSASB is seeking views on its Exposure Drafts by 15 September 2020. The AASB requests that if Australian stakeholders respond to the IPSASB’s Exposure Drafts, they also send the AASB a copy of their comments.