IFAC Proposes New Standard on Impairment of Public Sector Assets

The International Federation of Accountants has released a new exposure draft (ED) of an International Public Sector Accounting Standard (IPSAS) dealing with the impairment of public sector assets, including assets that are not held for cash-generating purposes.

Developed by IFAC's Public Sector Committee (PSC), ED 23, Impairment of Assets, complements IPSAS 17, Property, Plant and Equipment, and strengthens and enhances the guidance on financial reporting of these assets.

ED 23 proposes requirements for the identification, recognition, measurement, reversal and disclosure of an impairment loss in general purpose financial statements of public sector entities. Guidance in the ED will also provide useful information about an asset's value in use and changes in that value as input for asset management and resource allocation purposes.

Also featured in the ED are appendices with examples of indicators of impairment and the measurement of impairment loss. Additionally, it includes the PSC's basis for conclusion on key issues and a comparison of the proposed requirements of this ED with International Accounting Standard (IAS) 36, Impairment of Assets, on which it is based.

“This ED was developed in conjunction with the Governmental Accounting Standards Board (GASB) in the United States,” states Ian Mackintosh, PSC Chair. “I believe that both the PSC and GASB benefited from this process, which is illustrative of the benefits that the PSC and national standards setters can derive from working together on issues of mutual interest.”

Copies of the ED may be downloaded from IFAC's Web site at The deadline for receipt of comments is January 31, 2004. Comments should be sent by that deadline via email to, faxed to the attention of Paul Sutcliffe at +1-212-286-9570, or mailed to IFAC at the address above.

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