The International Federation of Accountants (IFAC)has issued an exposure draft designed to strengthen the disclosure of financial information about external assistance, such as emergency assistance and development aid received by governments in other countries.
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ED 32, Financial Reporting under the Cash Basis of Accounting – Disclosure Requirements for Recipients of External Assistance, proposes that the financial statements of recipients of external assistance disclose the total amount of external assistance received, used, and available during the reporting period. These disclosures will increase the transparency of the financial statements of recipients and contribute to greater accountability by the recipients of such assistance, the IFAC International Public Sector Accounting Standards Board reports.
The draft also encourages a range of additional disclosures which would further enhance the usefulness of the financial statements in the assessment of the financial position of recipients and of their use of external assistance.
“ED 32 reflects an approach that enhances the accountability of financial statements, does not impose an inappropriate burden on reporting entities, and can be justified on a cost-benefit basis across a wide range of jurisdictions. While establishing basic accountability requirements, it is also responsive to the ability of individual recipients to comply with the proposed requirements,” international board Chairman Philippe Adhémar said.
Before a final International Public Sector Accounting Standard is approved, ED 32 will be field tested. The IPSASB has secured the support of key regional and international organizations for this testing.
Comments on the ED are requested by March 31, 2007. The ED may be viewed by going to www.ifac.org/EDs. Comments may be submitted by email to [email protected]. They can also be faxed to the attention of the IPSASB Technical Director at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC’s Web site.