Wissenschaftliche Begleitung von IPSAS-Projekten

Presentation of Financial Statements in the Public Sector
(IPSASB research grant)

Annemarie Conrath-Hargreaves und Sonja Wüstemann

Financial statement presentation plays an important role as to whether the information provided is useful to users. Under IFRS, income and expenses included in the comprehensive income, but excluded from profit or loss, are recognized in the ‘other comprehensive income’ (OCI), which may either be presented as part of the income statement (single combined statement) or as a separate statement. By contrast, public sector entities applying IPSAS are required to draw up a statement of changes in net assets/equity as part of their financial statements, which presents ‘extraordinary’ income and expenses recognized directly in net assets/equity (such as re-measurement gains and losses) (IPSAS 1.118). Guided by its Conceptual Framework, the reporting model of the IPSASB does therefore not only use different terminologies than the IASB’s approach but also differs as to how the related information is presented.

Given the IPSASB’s general aim of alignment with IFRS, the question arises which of the two reporting models is superior with regards to providing useful information to the IPSAS’ primary user group of service recipients and resource providers (e.g., citizens, taxpayers) along with their representatives (e.g., legislators, members of parliament; auditors, councillors) and preparers of financial statements; in particular in terms of understandability and practicality. As acknowledged by the IASB in its aim to find “better ways to communicate OCI” (IASB, 2017), prior accounting literature concerned with the private sector suggests that the usefulness of the OCI in this context may be questioned. With regards to the public sector, however, scholars have yet to examine how financial statement presentation may impact on users and their processing of information in light of the objectives of financial reporting. Our research aims to address this gap by assessing which reporting model is best suited to meet the information needs of the IPSASB’s primary user group in terms of fulfilling the objectives of providing information that is useful for both accountability and decision making. More precisely, our study examines whether and how alternative presentation formats impact users’ processing of information, specifically, information related to the notion of income and expenses arising outside of surplus or deficit.

Recursivity in standard-setting processes: The measurement case of „fair value“ versus „market value“

Annemarie Conrath-Hargreaves, Jens Heiling und Sonja Wüstemann

Little is still known about how conceptual underpinnings of standards developed at the global level might impact on the potential enactment of these standards at the local level and vice-versa. Inspired by a normative approach to standard-setting, this paper draws on the socio-legal framework of recursivity to explore the role of the measurement objective in standard-setting processes of the International Public Sector Accounting Standards Board (IPSASB). The paper aims to contribute to the scarce empirical literature on standard-setting processes in public sector accounting by drawing on the measurement issue of ‘fair value’ versus ‘market value’. The analysis highlights that uncertainty as to the meaning terms carry can lead to confusion at both the global and the local level, in particular when the identification of measurement bases does not follow from the measurement objective. This is of practical relevance as it points to the importance of consistency in standard-setting to avoid conceptual mismatches between the global and the local, which may damage the global’s legitimacy.

Standard Setting in the Public Sector:
An Examination of the IPSASB Conceptual Framework and the Objectives of Public Sector Financial Reporting

Annemarie Conrath-Hargreaves und Sonja Wüstemann

Im Jahr 2014 hat das International Public Sector Accounting Standards Board (IPSASB) sein erstes speziell für die Bedürfnisse der transnationalen öffentlichen Rechnungslegung zugeschnittenes Rahmenkonzept veröffentlicht. Auch wenn das IPSAS grundsätzlich die Konvergenz mit den International Financial Reporting Standards (IFRS) anstrebt, weicht es unter anderem hinsichtlich der Zwecke vom IFRS-Rahmenkonzept ab, indem es Rechenschaftslegung (accountability) und Entscheidungsnützlichkeit (decision-usefulness) als gleichwertige übergeordnete Zielsetzungen der öffentlichen Rechnungslegung definiert. Unsere qualitativ-empirische Forschungsstudie untersucht, warum sich das IPSASB für die Entwicklung eines spezifischen (von den IFRS abweichenden) Rahmenkonzepts entschieden hat sowie auch den Prozess, der zu einer Aufnahme beider Zwecke geführt hat. Anhand der Analyse der Organisation der privaten transnationalen Standardsetzung für den öffentlichen Sektor und die Involvierung unterschiedlicher Akteure in diesem Prozess demonstriert unsere Studie das Streben des IASB nach gleichzeitig technischer und politischer Legitimität. Darüber hinaus wird gezeigt, dass das IPSASB in seinem Standardsetzungsverfahren in erheblichem Maße auf Individuen mit auf Erfahrung basierendem Fachwissen (experiential expertise) setzt und mit den öffentlichen Konsultationen im Wesentlichen (und lediglich) die Verifizierung der internen Überlegungen und Entscheidungen bezweckt wird. Es wird kritisiert, dass durch die starke Gewichtung des Fachwissens und der damit einhergehenden Überbetonung der technischen Legitimität die (überwiegend nicht fachkundigen) Bürger, die eigentlichen Hauptadressaten von IPSAS-Abschlüssen, zu Lasten der politischen Legitimität vom Standardsetzungsverfahren faktisch ausgeschlossen werden.