Interpretation and Application of IPSAS

20 Making the Transition to IPSAS

Moving to accounting under International Public Sector Accounting Standards (IPSAS) can be a challenging endeavor. Ensuring proper convergence to IPSAS entails not only a vast amount of work in the accounting arena of any given public sector entity or government but also often implies major changes in business processes and practices.

By using a project management approach in adopting IPSAS an organization/government can make certain that, for example:

• The project gets necessary support from top management;
• A sound governance structure is put in place;
• Communication and training plans are developed and managed;
• New accounting policies are written; and
• Necessary alignment of business processes will take place in a timely manner.

Sound project management may facilitate cost-effective adoption of IPSAS and a broader strengthening of business practices across the implementing organization/ government.

Transition to IPSAS covers a wide range of situations:

• Moving from IPSAS non-compliant cash accounting to IPSAS cash accounting;
• Moving from IPSAS cash accounting to full accrual accounting under IPSAS;
• Moving from modified accrual-based accounting or some accrual accounting standards to full accrual accounting under IPSAS.

The implementation of IPSAS is often seen as an integral part of public sector entities' quest to strengthen governance (see Chapter 2 of this book). Making the change to IPSAS in public entities and in particular within governments ...