NAME: INDY HONIMAE

ID: s11151381

CAMPUS: LAUCALA CAMPUS

COURSE: AF307 – Public Sector Accounting

ASSIGNMENT: Presentation on IPSAS 22

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 Table of Contents

Page Number
Introduction 3

Body 4-6

Conclusion 7

Bibliography 8

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 Introduction
This assignment describes the disclosures made in financial statements of government entities
especially in the public sector of a country. In this write up, one will discover what type of assets
those government ministries such as military, police and medical services are made up of and
how they will be recorded in consolidated financial statements. In regards to that, IPSAS 22 and
its components will be discussed in terms of what it contains which reflects its standards on the
disclosure of assets by military, police and medical services in the government financial
statements. Lastly, opinions on whether assets of those mentioned government ministries above
to be disclosed in consolidated financial statements will be argued with supportive article and
also standards relating to IPSAS 22.

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 Body

IPSAS 22 – Disclosure of Financial Information about the General Government Sector

(GGS)
IPSAS 22 concerns the disclosure of information, this is in terms of financial information about
the whole government because government needs to disclose any financial happenings within the
country. It has come about since government has lots of different kinds of assets, liabilities,
equity, revenue and expenses in its respective government entities therefore, IPSAS Board came
up with another IPSAS which is IPSAS 22.

IPSAS 22 Objective
The main objective of IPSAS 22 is to describe the disclosure requirement for government when
disclosing all its selected financial affairs within its ministries into one consolidated government
financial statement. This means all the financial activities happening within the police, the
military, health and so forth, all these needs to be disclosed in one financial statement only. It
will be really difficult for government when compared to a private organization example, the
Flour Mills of Fiji, it will be much easier for Flour Mills to prepare the consolidated financial
statements. This is because it is only a small entity as compared to government. Unlike the
government where all financial affairs of all the different types of departments and ministries
must be consolidated into just one financial statement. This is to satisfy the concept of IPSAS 22
which states that government is required to prepare the consolidated financial statements to
enhance the transparency.

General Government Sector (GGS)

This is made up of a group of government-controlled entities that provide public services which
are mainly non-market which includes industries such as health, education. This sector consists
of state, central and local government units thus controlled by government. They provide
services however, does not make profit and are very difficult to measure or valued. Another
characteristic is that these industries provide consumption for the community which involves
redistribution of income and mainly funded by government through grants and taxes from tax
payers, dividends, revenues and other borrowings.

Military Asset
Military assets are in terms of equipment, armory, supplies and services which are provided by
civil defence of a country for humanitarian assistance under the control of the government. Take
for example, guns, bullets, protection services, etc… Military is one of the government industries

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thus all its financial affairs will therefore be recorded in the financial statements and later into 1
consolidated financial statement.
Police Assets
Police assets are in terms of those assets that provide services to protect the country and uphold
the law and order in the country. Take for example, their self-protection equipment, vehicles,
finger print data, etc… This is another government controlled entity which is operating under
government.
Medical Services
Health is one of the government entities and is also controlled by the government. Health
provides medical services in the country and see to it that the country received better health
services in preventing health issues. Their assets are in terms of equipment that carry out x-rays,
scanning, medications, etc…

Discussion
In relation to the question, in some cases I think government should disclose the assets owned by
the military, police and medical services in consolidated financial statement as stated in IPSAS
22. However, in other cases I think government might face difficulties in consolidating all
financial affairs happening within the government entities.
In IPSAS 22 it requires government to consolidate every financial activities or affairs happening
in all its entities in a consolidated financial statement for its users. It continue to state that
government is to disclose information concerning the financial happenings in the country
including all the organizational entities, all government departments, financial affairs that needs
to be recorded and that need to be shown to the public. In public sector, different entities records
each of their assets in the financial statements example, assets like roads are recorded in the
consolidated financial statements. Now there are not only one road but all the roads in the
country and it will be really difficult for government to record each road in the consolidated
financial statements that is why in IPSAS 22 it allows government to have their own policies and
requirements on how to record the information or disclose information concerning financial
statements. Therefore, for information to be disclosed, government need to be complying with
accounting policies in place for preparing and presenting.
By looking at the military, police assets and medical services, these assets are all provided by
these government controlled entities in a country. Now, all these entities or industries have their
own financial statements which they record all their financial affairs and later the government
will gather all financial statements and consolidate all the information into one financial
statement. The assets within the military comes under Property, Plant and Equipment in IPSAS
17. In IPSAS 17 it requires a government entity to recognize the general asset recognition to
property, plant and equipment cost at the same time they incurred. However, the Australian

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Accounting Research Foundation stated that “an asset should be recognized in the statement of
financial position when and only when: it is probable that the future economic benefits embodied
in the asset will eventuate and the asset possesses a cost or other value that can be measured”
(Board, 1995).
In terms of military assets such as bullets can be valued and be recognized in the financial
statements under class of asset at the time it is purchased. Also, it has a future benefits to the
country for the defense enforcement. For the medical services provided such as the X-Rays we
get from the hospitals, it does not have a present value which it can be reported in the financial
statements. When we look at the police, for example, the finger prints recorded in the data
system of the police. They cannot disclose those data in financial statements because of its
confidentiality as well as they are difficult to be valued by the government.
I think government should disclose those assets in consolidated financial statement to enhance
accountability and transparency in the country. It will also help the government entities financial
statements “Financial consolidation is critical to fulfill the information and accountability…”
(Bruce & Warren, 2018). Government should work at its best to consolidate all financial
statements into one financial statement as it will clearly shows the tax payers how well the
resourced money is used for the benefits of all. There is a need for the improvement of efficiency
of resources and services provided at the national level of most Pacific Islands “Consolidating
the accounts of public sector entities to provide an overview of a government’s total performance
is one method for addressing this need and driving higher levels of accountability for use of
public resources” (Bruce & Warren, 2018).
Despite wanting the government to disclose a consolidated financial statement, it is still up to the
government as stated in IPSAS 22 that government will make the choice to what should be
disclosed to the public. One difficulty in which will not able them to do that is the lack of funds
where government needs to fund the programs to capture all the financial happenings in all
department of governments in order to be consolidated into one financial statement. Not only
that but also human resources or employees to operate those programs. These are some
difficulties and also expenses government will have to meet in order to comply with IPSAS 22.
Therefore, as much as we want the government to disclose all financial affairs within the
government entities, under the rules and regulations of IPSAS 22 government do have the choice
of what to be given to the public and what not to be shown in the disclosure in the financial
statement.

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 Conclusion
To conclude, IPSAS 22 required that there be only one consolidated financial statement for all
government departments despite many difficulties faced by the government in consolidating
those financial statements. Some assets of those government entities can be easily recorded in the
financial statements with a value whereas, some did not match the asset recognition policy. This
portrays difficulties for the entities in terms of recording in the financial statements.
Consolidating of financial statements is critical as it provides accountability and transparency by
the government to the public on how the money resources have been used. Despite the need for
the government to disclose all the financial affairs of the entities, still in regards to IPSAS 22, it
is entirely up to the government to decide what to disclose in the consolidated financial statement
and what not to.

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Bibliography
Board, P. S. A. S., 1995. Definition and Recognition of the Elements of Financial Statements, Victoria:
Australian Accounting Research Foundation.

Bruce, V. & Warren, M., 2018. Progressive public administration and new public management in public
sector accountancy. Meditari Accountancy Research, 26(1), pp. 44-69.

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