Cash Basis IPSAS: Financial Reporting Under the Cash Basis of Accounting


The Cash Basis IPSAS prescribes the manner in which general purpose financial statements should be presented using the cash basis of accounting.

Information about the cash receipts, cash payments and cash balances of an entity is necessary for accountability purposes. It also provides input useful for assessments of the ability of the entity to generate adequate cash in the future and the likely sources and uses of cash. In making and evaluating decisions about the allocation of cash resources and the sustainability of the entity's activities, users require an understanding of the timing and certainty of cash receipts and cash payments.

Compliance with the requirements and recommendations of this standard ensures comprehensive and transparent financial reporting of the cash receipts, cash payments and cash balances of the entity. It also enhances comparability with the entity's own financial statements of previous periods and with the financial statements of other entities which adopt the cash basis of accounting.

The IFRS on which the IPSAS is based

The Cash Basis IPSAS is an IPSAS specifically for the public sector. As a result there is no IFRS equivalent.


Principal definitions

Unlike IPSAS 2, the Cash Basis IPSAS defines cash as cash on hand, demand deposits and cash equivalents.

Similarly to IPSAS 2, cash equivalents are defined as short-term, highly liquid investments (with maturities ...

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