Interpretation and Application of IPSAS

12 Employee Benefits, Social Benefits, and Other Liabilities

The main part of this chapter deals with IPSAS 25 on Employee Benefits, while remaining parts touch on the accounting for other liabilities and social benefits. An issue in public sector financial management during recent years has been that of the funding by entities of their employee pension schemes. Public sector pension schemes represent a significant element of the public finances. These schemes may be administered by separate entities/organizations or within government, but the benefits accruing to members of the schemes are often guaranteed under statute. Pension scheme assets and liabilities therefore often represent assets and liabilities of the government itself. The objective of IPSAS 25 is to prescribe the accounting and disclosure of employee benefits.

In addition to employee benefits, public sector entities can also have liabilities in the form of contributions received (which can be short or long term) and accounts payables (short term) and accrued liabilities (short term).

Contributions Received in Advance, Accounts Payable, and Accrued Liabilities

Liabilities in the form of contributions received (which can be short or long term) and accounts payables (short term) and accrued liabilities (short term) are very common, especially in intergovernmental organizations.

The IPSAS Financial Reporting in Practice 12.1 below shows how the World Health Organization (WHO) described their contributions received ...