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Centre for Financial and Management Studies (CeFiMS)

Financial Reporting (IPSAS)

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Accounting for public sector organisations is a vital yet complex task. Like businesses, public organisations need to keep accurate records of the income and spending. This information is needed both for internal decision making and to demonstrate accountability to their stakeholders.

This course is designed to provide sufficient knowledge of public sector financial reporting practices to use the information produced and to contribute to debates on the development of reporting policy. We will concentrate on financial reporting using International Public Sectors Accounting Standards (IPSAS). Although these standards have now been adopted in some countries, many other countries are in the process of adoption or have implemented systems similar to IPSAS.


Study Guide

You will receive a looseleaf binder containing eight units and this is your core learning resource as it directs your study. Each unit has recommended reading either from the core text books or from supplementary readings which are included in the Course Reader. The study guide also directs you through the case studies which form an important part of this module.


Bandy, G. (2011) Financial Management and Accounting in the Public Sector. Oxon: Routledge.

Müller-Marqués Berger, T. and Ernst & Young (2012), IPSAS Explained A Summary of International Public Sector Accounting Standards, 2nd Edition, Chichester: John Wiley & Sons Ltd.


You are provided with a range of academic journal articles, extracts from supplementary text books and other reports or material. You will also consider a number of Case Studies. All these comprise the Course Reader which forms an essential part of this course.

Virtual Learning Environment

You will have access to the VLE, which is a web-accessed learning environment. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Objectives and learning outcomes of the course

When you have completed your study of this module, you will be able to:

  • When you have completed your study of this course, you will be able to
  • discuss the theoretical framework and principles of financial reporting for public sector entities
  • evaluate the adoption of the International Public Sector Accounting Standards (IPSAS)
  • critically assess accountability in relation to public sector financial reports
  • explain and contrast the differences in external reporting on a cash and accruals basis
  • determine the disclosure of specific assets and liabilities in accordance with the IPSAS
  • discuss the process of consolidation for public sector financial reports and evaluate the usefulness of the reports produced
  • discuss the importance of financial governance and its relationship to public accountability and explain the role of financial reports in governance

Scope and syllabus

Course Units
Unit 1: Context of Public Sector Financial Reporting

This module begins by introducing you to the need for public sector organisations to produce financial reports and considering why it would be useful for such financial reporting to be consistent world-wide. We will look at the differences between the private and public sectors, as well as identifying key users of financial information. You will see how accounting standards for the public sector are developed and adopted. Understanding this financial reporting context is crucial for the rest of the course.

Unit 2: Budgeting and Performance Reporting

From considering the concept of budgeting and accountability you will study a range of alternative approaches to budget setting, before moving on to see how budgets may be reported including the requirements of International Public Sector Accounting Standard (IPSAS) 24. In particular, you will consider programme budgeting and performance budgeting where funds are allocated to specific programmes or linked to results, respectively. You will also explore some case studies on the adoption of programme and performance budgeting.

Unit 3: Accounting Concepts and Bases

From exploring alternative accounting bases that may be applied to budgets as well as to financial reporting, this Unit defines both cash and accruals bases, with specific focus on external financial reporting. Benefits, limitations and modifications to cash and accruals bases are also considered. The adoption of these accounting bases is explored in the public sector, as well as in relation to the International Public Sector Accounting Standards (IPSAS). Case studies which will enable you to explore the use of the cash and accruals bases in real life situations.

Unit 4 Accounting for Public Assets under IPSAS

This Unit builds on the accruals concept by exploring how to account for assets. The unit defines both current and non-current assets, with specific types of assets considered in more detail. In particular, the unit will focus on inventories, the non-current assets of property, plant and equipment (PPE), and heritage assets. As in the previous unit, you will also study two case studies which will enable you to explore accounting for non-current assets in real life situations.

Unit 5 Accounting for Liabilities

This Unit looks at liabilities. The unit initially defines liabilities before moving on to define provisions and contingent liabilities. The distinction between liabilities, provisions and contingent liabilities is also clarified, as well as the relevant accounting standards reviewed. The unit specifically focuses on government liabilities which are, of course, unique to the public sector considering pension liabilities in particular. Two case studies which allow you to consider the application of the theory on liabilities to real life situations.

Unit 6: Whole of Government Accounts (WGA)

This Unit turns to how governments or certain public sector organisations may be grouped together and merge their financial statements into consolidated financial statements. In particular, the unit considers the potential users and uses of consolidation financial statements, focussing on the use of such statements to judge governmental financial performance. Two case studies to explore the use of consolidated financial statements in real life situations.

Unit 7: Public-Private Partnerships (PPP)

Having studied the accounting treatment of individual elements including assets and liabilities, this unit considers how such items may be accounted for under a particular type of partnership between public and private sector organisations, and in this case, those known as Public Private Partnerships (or PPP's).

Unit 8: Financial Governance of Public Bodies

In Unit 1, you explored the arguments as to why accounting standards are needed. Having now considered some specific accounting standards and how financial reports are prepared, this unit now revisits the need for financial reporting in the context of the financial governance of public bodies.

Method of assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 5, and the second assignment at the end of the module, on the Tuesday after Week 8. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in April each year.