IPSAS Explained: A Summary of International Public Sector Accounting Standards, 2nd Edition

IPSAS 29: Financial Instruments: Recognition and Measurement

Objective

The objective of IPSAS 29 is to establish principles for recognizing and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. Together with IPSAS 28 and IPSAS 30, IPSAS 29 covers all aspects of the accounting for and disclosure of financial instruments.

The IFRSs on which the IPSAS is based

IPSAS 29 is based on IAS 39, Financial Instruments: Recognition and Measurement (revised 2009), IFRIC 9, Reassessment of Embedded Derivatives, and IFRIC 16, Hedges of a Net Investment in a Foreign Operation.

The IASB issued in the meantime IFRS 9, Financial Instruments, to replace IAS 39 in several phases. The IPSASB committed a project to update IPSASs 28-30 once the IASB completes its project on IFRS 9.

Content

Principal definitions (cf. IPSAS 29.10 for more details)

The terms financial instrument, financial asset, financial liability and equity instrument are defined in IPSAS 28. These terms are used in IPSAS 29 with the same meaning.

IPSAS 29 specifies categories of financial instruments. This classification is of importance because the accounting treatment for a particular financial instrument depends on its classification. IPSAS 29 distinguishes between the following categories of financial assets and financial liabilities:

Table 19: Categories of financial assets and financial liabilities

Financial assets or financial liabilities at fair value through surplus or ...