The IPSASB’s measurement project : views from international and Maltese stakeholders

Abstract

Purpose: This study explored the current developments on the measurement of assets of public sector entities. The main focus was on the Consultation Paper, and the opinions of international and local stakeholders on IPSAS Measurement. This research also attempted to identify the significant challenges for the Maltese Treasury upon the implementation of IPSAS Measurement. Design: The objectives of this study have been satisfied through a qualitative research approach. Semi-structured interviews were conducted with qualified members and practitioners within the public and private sector, respectively. A documentary analysis was also carried out on the responses received by the IPSASB on the Consultation Paper and illustrative Exposure Draft. Findings: The IPSASB addressed the issues related to measurement by identifying the commonly used measurement bases and assessing their relevance and applicability within the public sector context. Historical Cost, Replacement Cost, Fair Value, and Market Value were assessed for further guidance by the IPSASB. Fair Value attracted the most comments by stakeholders due to its limited guidance within the public sector framework. Stakeholders outlined the need to clarify the measurement definitions and concepts, and to incorporate application guidance within IPSAS Measurement in order to assist financial statement preparers in valuing their assets. The Maltese stakeholders recognised the importance of the local implementation of IPSAS Measurement to enhance public sector financial reporting. Nevertheless, the support of an effective accounting system and trained personnel is key to the efficient implementation of IPSAS Measurement within the local context. Conclusions: Despite the concerns raised by several stakeholders, this study concluded that the development of IPSAS Measurement would guide preparers in efficiently valuing their assets and presenting true and fair financial statements. Furthermore, a generic measurement standard would improve transparency and comparability across the financial reports of public sector entities. Value: This study is of value to both the Treasury officials and other financial statement preparers within the public sector when dealing with the valuation of assets.