Iceland: Technical Assistance Report - IPSAS in Iceland: Towards Enhanced Fiscal Transparency
IMF Staff Country Reports, December 30, 2014
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- Canonical URL
- Iceland: Technical Assistance Report - IPSAS in Iceland: Towards Enhanced Fiscal Transparency
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Bibliographic details
- Published: December 30, 2014
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498393355.002
Overview
- Publication date: December 30, 2014
- Report focus: Transition toward IPSAS-based accounting and enhanced fiscal transparency for central government consolidated “whole-of-government” financial statements.
- Scope: Accounting standards, Accrual accounting, Budget planning and preparation, Financial statements, Fiscal accounting and reporting, Public financial management (PFM).
- Document details:
- Pages: 63
- Volume: 2014
- Issue: 353
- Series: Country Report No. 2014/353
- DOI: https://doi.org/10.5089/9781498393355.002
- Stock No: 1ISLEA2014004
- ISBN: 9781498393355
- ISSN: 1934-7685
Key findings
- Consolidated “whole-of-government” financial statements of the central government will facilitate fiscal policy informed by a broader view of public finances.
- Recognition and systematic accounting of physical assets are expected to enhance transparency and facilitate management and budgetary decisions.
- Under the current framework such assets—including roads, bridges, tunnels, land, and buildings—are treated as expenses and written off in the year in which they are acquired.
- Some changes in valuation of financial assets and liabilities may also be required.
- The cash flow statement should provide information about key revenues and expenditures.
- The budget should recognize depreciation as an expense but need not appropriate for depreciation at this stage.
- The budgeted operating statement should include depreciation as an expense to determine the operating result.
Detailed recommendations for accounting and reporting
- Prepare consolidated “whole-of-government” financial statements for the central government to support broader fiscal analysis and policymaking.
- Recognize and systematically account for physical assets rather than expensing them in the acquisition year; physical asset examples explicitly noted: roads, bridges, tunnels, land, and buildings.
- Reassess valuation approaches for financial assets and liabilities where current valuation practices are inconsistent with IPSAS requirements.
- Ensure the cash flow statement is structured to disclose key revenue and expenditure flows that are critical for fiscal transparency.
- Include depreciation as an expense in the budgeted operating statement to determine the operating result, while not requiring appropriation for depreciation at the current stage.
Implications for budget planning and preparation
- Align budgets and budgetary reports with indicators expected under Government Finance Statistics Manual of 2001 (GFSM 2001).
- Introduce accrual accounting elements—particularly recognition of depreciation and asset capitalization—to better reflect economic reality in operating results.
- Maintain pragmatic sequencing: recognize depreciation for operating result measurement but defer appropriation requirements for depreciation until implementation capacity is established.
Keywords and subject tags (as provided)
- accounting policy, Accounting standards, Accrual accounting, accrual basis, Budget planning and preparation, cash flow statement, CR, Financial statements, Fiscal accounting and reporting, ISCR, line item, opening balance, opening IPSAS balance sheet, preparation process, replacement cost
Source: International Monetary Fund. Fiscal Affairs Dept. "Iceland: Technical Assistance Report - IPSAS in Iceland: Towards Enhanced Fiscal Transparency", IMF Staff Country Reports 2014, 353 (2014), Pages: 63, DOI: https://doi.org/10.5089/9781498393355.002.
Content in this bundle
- _cr14353 — Preface and Executive Summary