Budget 2007: Government to adopt IFRS. By Rob Lewisby
The government has announced it is to implement International Reporting Standards (IFRS) for its annual accounts, as part of the budget release.
The budget also revealed the government’s intention that Whole of Government Accounts (WGA) will now be published for the first time for the 2008-09 financial year. The scheduling is to allow time for the alignment of local and central government accounting policies and to enable WGA to be prepared on the new IFRS basis.
The budget report says that “in order to bring consistency and comparability between financial reports in the global economy and to follow private sector best practice [that from the first year of the CSR period] accounts will be prepared using IFRS adapted as necessary for the public sector.”
The Financial Reporting Advisory Board has been monitoring the impact various IFRS issues might have on the public sector for some time. In June last year for example, it reported on the public sector implications of IFRS 6 (dealing with the exploration and exploitation of minerals), despite the complete absence of any public sector activity in that area.
Some will see in all this the hand of treasury finance director Mary Keegan, formerly chair of the Accounting Standards Board (ASB), and now the managing director of the government financial management directorate. During her tenure at the ASB she was a powerful advocate of IFRS compliance.
The GASette, the magazine of the government accountancy service, described her work with the ASB as “pressing ahead” with the work begun by her predecessor Andrew Likierman, whose contribution was described in turn as “kick-starting the radical shake-up that brings government finances closer to private sector accounting”.
Keegan, a former partner at PriceWaterhouseCoopers with over 30 years’ experience in the private sector, has never made any bones about the Treasury’s intention to implement IFRS. She has been explaining away the delays in their implantation since the summer of 2005.
“There are a couple of reasons why we haven’t rushed this,” she said in that year. “Not least because the IASB has only just started to think about how it will account for PFI.”