| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2013) 114 final (6.3.13) |
| Publication Date | 06/03/2013 |
| Content Type | Policy-making, Report |
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This report fulfils the Commission’s obligation, under Article 16(3) of Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States, to assess the suitability of the International Public Sector Accounting Standards (IPSAS) for the Member States by 31 December 2012. It is based on information received through consultation with Commission services, international organisations such as the IMF, expert practitioners and other interested parties within the Member States and beyond, as well as the IPSAS Board, the standard-setter for these standards. The sovereign debt crisis has underlined the need for governments to clearly demonstrate their financial stability and for more rigorous and more transparent reporting of fiscal data. Council Directive 2011/85/EU (the Budgetary Frameworks Directive) recognises the crucial role in EU budgetary surveillance of complete and reliable fiscal data, comparable across Member States. It therefore sets out the rules on Member State budgetary frameworks that are necessary to ensure compliance with the obligation under Article 126 of the Treaty on the Functioning of the European Union (TFEU) to avoid excessive government deficits. On the one hand, fiscal discipline plays an essential role in safeguarding Economic and Monetary Union, and on the other hand, financial stability is based on trust. This report discusses one of the tools for building this trust and for better measuring and forecasting the fiscal situation: harmonised public sector accruals-based accounting standards. Article 3 of Directive 2011/85/EU requires Member States to ‘have in place public accounting systems comprehensively and consistently covering all sub-sectors of general government and containing the information needed to generate accrual data with a view to preparing data based on the ESA 95 standard’. It thereby acknowledges the essential incoherence between public sector accounts, which only record cash flows, and the fact that EU budgetary surveillance is based on ESA 95 accruals data. This means that cash data have to be converted into accruals through approximations and adjustments involving macro-based estimates. Moreover, where accruals accounts do not exist at the micro level, financial transactions and balance sheets have to be derived from a variety of different sources, leading to a ‘statistical discrepancy’ between the deficit compiled via non-financial accounts and that compiled via financial accounts. The lack of coherence between primary public-sector accounts and ESA 95 accruals data is acknowledged in the Commission communication of 15 April 2011 to the European Parliament and the Council 'Towards robust quality management for European Statistics'. This communication draws attention to the high dependence of the quality of European-level statistical information on the appropriateness of the entire production process. Eurostat therefore promotes a system of harmonised accruals-based accounting standards, consistent with the ESA, for all entities of the government sector. IPSAS is currently the only internationally recognised set of public-sector accounting standards. It is founded on the international financial reporting standards (IFRS) widely applied by the private sector and at this point consists of a set of 32 accruals accounting standards, plus one cash-based standard. It is in this light that Article 16(3) of Directive 2011/85/EU requires an assessment of the suitability of IPSAS for the Member States. |
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| Source Link | Link to Main Source http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2013:114:FIN |
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| Subject Categories | Culture, Education and Research |
| Countries / Regions | Europe |
