PUBLIC SECTOR

IPSAS 22—DISCLOSURE OF FINANCIAL INFORMATION

ABOUT THE GENERAL GOVERNMENT SECTOR
History of IPSAS
This version includes amendments resulting from IPSASs issued up to January 15,
2011.
IPSAS 22, Disclosure of Financial Information about the General Government
Sector was issued in December 2006.

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IPSAS 22—DISCLOSURE OF FINANCIAL INFORMATION
ABOUT THE GENERAL GOVERNMENT SECTOR
CONTENTS

Paragraphs
Introduction ................................................................................................. IN1–IN8
Objective ..................................................................................................... 1
Scope ........................................................................................................... 2–14
Segment Reporting .............................................................................. 7–8
Statistical Bases of Financial Reporting .............................................. 9–11
Accounting Policies ............................................................................. 12–14
Definitions .................................................................................................. 15–22
Government Business Enterprises ....................................................... 16
General Government Sector ................................................................. 17–22
Public Financial Corporations Sector ........................................... 19
Public Non-Financial Corporations Sector ................................... 20–22
Accounting Policies .................................................................................... 23–34
Further Disaggregation ........................................................................ 33–34
Disclosures .................................................................................................. 35–46
Reconciliation to the Consolidated Financial Statements .................... 43–44
Reconciliation to Statistical Bases of Financial Reporting .................. 45–46
Effective Date ............................................................................................. 47–48
Basis for Conclusions
Implementation Guidance

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International Public Sector Accounting Standard 22, Disclosure of Financial
Information about the General Government Sector, is set out in paragraphs 1–48.
All the paragraphs have equal authority. IPSAS 22 should be read in the context of
its objective, the Basis for Conclusions, and the Preface to the International Public
Sector Accounting Standards. IPSAS 3, Accounting Policies, Changes in
Accounting Estimates and Errors, provides a basis for selecting and applying
accounting policies in the absence of explicit guidance.

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Introduction
Reasons for Issuing the IPSAS
IN1. Statistical bases of financial reporting such as the ystem of National Accounts
1993 (SNA 93 and updates), Government Finance Statistics Manual 2001
(GFSM 2001), and the European System of Accounts 1995 (ESA 95) require
governments to compile financial information about the general government
sector (GGS). For statistical purposes, the GGS comprises government
controlled entities primarily engaged in nonmarket activities. The GGS is
sometimes described as comprising those entities that fulfill the core functions
of government as their primary activity.
IN2. Current IPSASs require entities to prepare financial statements that include
information about all the resources controlled by the reporting entity, and
prescribe rules for consolidation of all controlled entities. IPSASs also require
financial statements to make disclosures about segments. A segment is
defined as a distinguishable activity or group of activities of an entity for
which it is appropriate to separately report financial information for the
purpose of evaluating the entity’s past performance in achieving its objectives
and for making decisions about the future allocation of resources. IPSASs do
not require public sector entities to disclose information about the GGS in
their financial statements.
IN3. This Standard establishes requirements for governments which elect to
disclose information about the GGS and prepare financial statements under
the accrual basis of accounting as prescribed by IPSASs. The disclosures
required by this Standard provide a useful bridge to the statistical bases of
reporting.

Main Features of the Standard

IN4. This Standard establishes requirements for preparing and presenting
information about the GGS. The Standard is only applied in respect of a
government’s consolidated financial statements. Information disclosed in
accordance with this standard disaggregates those consolidated financial
statements according to the GGS boundaries as specified in statistical bases of
financial reporting. The Standard does not permit reporting entities to
consolidate information about entities that are not subject to common control,
as statistical information about government finances published by a statistical
agency would.
IN5. This Standard requires entities electing to make GGS disclosures to apply all
IPSASs to those disclosures except IPSAS 6, Consolidated and Separate
Financial Statements. Statistical bases of financial reporting use different
consolidation rules to IPSAS 6; applying IPSAS 6 would not enable
comparison of financial statement information with GGS information.

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IN6. This Standard requires a different treatment of investments in the public
corporations sectors than is normally required by IPSASs. IPSAS 6 requires
full consolidation of all entities, however, this Standard requires the public
financial corporations sector and the public non-financial corporations sector
to be presented as investments of the general government sector.
IN7. Making the GGS disclosures set out in this IPSAS does not exempt entities
from the operation of IPSAS 18, Segment Reporting.
IN8. This Standard applies for annual periods beginning on or after January 1,
2008, but earlier application is encouraged.

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Objective
1. The objective of this Standard is to prescribe disclosure requirements for
governments that elect to present information about the general government
sector (GGS) in their consolidated financial statements. The disclosure of
appropriate information about the GGS of a government can enhance the
transparency of financial reports, and provide for a better understanding of
the relationship between the market and non-market activities of the
government, and between financial statements and statistical bases of
financial reporting.

Scope
2. A government that prepares and presents consolidated financial
statements under the accrual basis of accounting and elects to disclose
financial information about the general government sector shall do so in
accordance with the requirements of this Standard.
3. Governments raise funds from taxes, transfers, and a range of nonmarket and
market activities to fund their service delivery activities. They operate
through a variety of entities to provide goods and services to their
constituents. Some entities rely primarily on appropriations or allocations
from taxes or other government revenues to fund their service delivery
activities, but may also undertake additional revenue-generating activities,
including commercial activities in some cases. Other entities may generate
their funds primarily or substantially from commercial activities. These
include government business enterprises (GBEs) as defined in IPSAS 1,
Presentation of Financial Statements.
4. Financial statements for a government prepared in accordance with IPSASs
provide an overview of (a) the assets controlled and liabilities incurred by the
government, (b) the cost of services provided by the government, and (c) the
taxation and other revenues generated to fund the provision of those services.
Financial statements for a government, which delivers services through
controlled entities, whether primarily dependent on the government budget to
fund their activities or not, are consolidated financial statements.
5. In some jurisdictions, financial statements and budgets for the government, or
sectors thereof, may also be issued in accordance with statistical bases of
financial reporting. These bases reflect requirements consistent with, and
derived from, the System of National Accounts 1993 (SNA 93) prepared by
the United Nations and other international organizations. These statistical
bases of financial reporting focus on the provision of financial information
about the GGS. The GGS comprises those nonprofit entities that undertake
nonmarket activities and rely primarily on appropriations or allocations from
the government budget to fund their service delivery activities (hereafter

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referred to as nonmarket entities or activities). The statistical bases of
financial reporting may also provide information about (a) the corporations
sector of government that primarily engages in market activities (usually
characterized as the public financial corporations (PFC) sector and the public
nonfinancial corporations (PNFC) sector), and (b) the public sector as a
whole. The major features of the PFC and PNFC sectors are outlined at
paragraphs 19 and 20 of this Standard.
6. Financial statements consolidate only controlled entities. Such a limitation is
not made in statistical bases of financial reporting. In some jurisdictions, a
national government controls state/provincial and local government entities,
and therefore its financial statements consolidate those levels of government,
but in other jurisdictions they do not. In all jurisdictions, under statistical
bases of financial reporting, the GGS of all levels of government are
combined, so in some jurisdictions the GGS will include units that financial
statements do not consolidate. This Standard disaggregates the consolidated
financial statements of a government. Therefore, it prohibits the presentation,
as part of the GGS, of any entity not consolidated within a government’s
financial statements.

Segment Reporting
7. IPSAS 18, Segment Reporting, requires the disclosure of certain information
about the service delivery activities of the entity and the resources allocated
to support those activities for accountability and decision-making purposes.
Unlike the sectors reported under statistical bases of financial reporting,
segments reported in accordance with IPSAS 18 are not based on a distinction
between market and nonmarket activities.
8. The disclosure of information about the GGS does not replace the need to
make disclosures about segments in accordance with IPSAS 18. This is
because information about the GGS alone will not provide sufficient detail to
enable users to evaluate the entity’s past performance in achieving major
service delivery objectives, when those objectives are achieved through non-
GGS entities. For example, identifying the GGS as a segment will not provide
information about a government’s performance in achieving its
telecommunication, healthcare or educational objectives, where government
corporations or quasi-corporations deliver services related to those objectives.
Because the GGS is only a subset of the government as a whole, important
information would be omitted if a government did not present segment
information in respect of its consolidated financial statements.

Statistical Bases of Financial Reporting

9. The objectives of financial statements prepared in accordance with IPSASs
and those prepared in accordance with statistical bases of financial reporting
differ in some respects. The objectives of financial statements prepared in

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accordance with IPSASs are to provide information useful for decision

making, and to demonstrate the accountability of the entity for the resources
entrusted to it and which it controls. The purpose of financial statements
prepared in accordance with statistical bases of financial reporting is to
provide information suitable for analyzing and evaluating fiscal policy,
especially the performance of the GGS and the broader public sector of any
country. In addition, although statistical bases of financial reporting may be
described in accounting terms, they might differ in important ways from the
underlying financial accounting system from which most of the statistics
about government finances will be derived. However, the IPSASs and the
statistical bases of financial reporting also have many similarities in the
treatment of transactions and events. For example, they adopt an accrual basis
of accounting, deal with similar transactions and events, and in some respects
require a similar type of report structure.
10. In some jurisdictions, the disclosure of appropriate information about the
GGS in financial statements can support and enhance the decision making of,
and accountability to, users of those statements. For example, disclosure of
information about the GGS is consistent with enhanced transparency of
financial reporting, and will assist users of the financial statements to better
understand:
(a) The resources allocated to support the service delivery activities by the
GGS, and the government’s financial performance in delivering those
services; and
(b) The relationship between the GGS and the corporations sectors, and
the impact each have on overall financial performance.
11. In those jurisdictions where financial statements for the government are
prepared in accordance with statistical bases of financial reporting and widely
published, the disclosure of information about the GGS in financial
statements will form a useful link between the financial statements prepared
in accordance with IPSASs and those prepared in accordance with statistical
bases of financial reporting. This will assist users in reconciling information
presented in financial statements to information presented in statistical
reports. IPSAS 24, Presentation of Budget Information in Financial
Statements, requires that financial statements include a comparison of budget
and actual amounts on a basis consistent with that adopted for the budget.
Where government budgets are prepared for the GGS rather than the
government as a whole, financial information about the GGS disclosed in
accordance with this Standard will be relevant to the comparisons required by
that IPSAS.

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Accounting Policies
12. IPSAS 3, Accounting Policies, Changes in Accounting Estimates and Errors
requires the development of accounting policies to ensure that the financial
statements provide information that meets a number of qualitative
characteristics. The compilation and presentation of GGS data that satisfy the
qualitative characteristics of information provided in financial statements and
related audit requirements may add significantly to the workload of preparers
and auditors in many jurisdictions, and may increase the complexity of the
financial statements. This will be particularly so in jurisdictions where
financial statements based on, or incorporating, GGS disclosures in
accordance with statistical bases of financial reporting are not currently
prepared. In addition, in some jurisdictions, users may not be dependent on
financial statements for information about the GGS. In those jurisdictions, the
costs involved in preparing and presenting GGS disclosures as part of the
financial statements may be greater than their benefit. Therefore, this
Standard allows, but does not require, the disclosure of information about the
GGS. Whether or not disclosure of information about the GGS will be made
in financial statements will be determined by the government or other
appropriate authority in each jurisdiction.
13. This Standard requires that when disclosures about the GGS are made in
financial statements, those disclosures are to be made in accordance with the
requirements prescribed in this Standard. This will ensure that an appropriate
representation of the GGS is made in the financial statements, and that
disclosures about the GGS satisfy the qualitative characteristics of financial
information, including understandability, relevance, reliability, and
comparability.
14. IPSASs generally apply to all public sector entities. However, it is only
possible to disclose a meaningful representation of the GGS for a government
– not its individual controlled entities. Therefore, this Standard specifies
requirements for application only by governments that prepare consolidated
financial statements under the accrual basis of accounting as prescribed by
IPSASs. These governments may include national, state/provincial, and local
governments.

Definitions
15. The following term is used in this Standard with the meaning specified:
The General Government Sector comprises all organizational entities of
the general government as defined in statistical bases of financial
reporting.
Terms defined in other IPSASs are used in this Standard with the same
meaning as in those Standards, and are reproduced in the Glossary of
Defined Terms published separately.
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Government Business Enterprises (GBEs)

16. GBEs include both trading enterprises, such as utilities, and financial
enterprises, such as financial institutions. GBEs are, in substance, no different
from entities conducting similar activities in the private sector. GBEs
generally operate to make a profit, although some may have limited
community service obligations under which they are required to provide some
individuals and organizations in the community with goods and services at
either no charge or a significantly reduced charge.

General Government Sector

17. Under statistical bases of financial reporting, the public sector comprises the
GGS, PFC, and PNFC sector. Additional subgroups within these sectors may
be identified for statistical analytical purposes.
18. The GGS is defined in the SNA 93 (and updates) as consisting of (a) all
resident central, state, and local government units, (b) social security funds at
each level of government, and (c) nonmarket nonprofit institutions controlled
by government units. Under statistical bases of financial reporting, the GGS
encompasses the central operations of government, and typically includes all
those resident nonmarket nonprofit entities that have their operations funded
primarily by the government and government entities. As such, the financing
of these entities is sourced primarily from appropriation or allocation of the
government’s taxes, dividends from government corporations, other revenues,
and borrowings. The GGS typically includes entities such as government
departments, law courts, public educational institutions, public health care
units, and other government agencies. The GGS does not include PFCs or
PNFCs. Disclosure of GGS information will be made in those jurisdictions
where strengthening the link between IPSASs and statistical bases of
financial reporting is considered useful and relevant to users of financial
statements. Governments electing to make GGS disclosures will therefore
need to ensure that the information about the GGS included in the financial
statements is consistent with the definition of GGS, and any interpretations
thereof, adopted for statistical bases of financial reporting in their jurisdiction.

Public Financial Corporations Sector

19. The PFC sector comprises resident government-controlled financial
corporations, quasi-corporations, and nonprofit institutions that primarily
engage in financial intermediation and the provision of financial services for
the market. Included within this sector are government-controlled banks,
including central banks, and other government financial institutions that
operate on a market basis.

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Public Non-Financial Corporations Sector
20. The PNFC sector comprises resident government-controlled non-financial
corporations, quasi-corporations, and nonprofit institutions that produce
goods or nonfinancial services for the market. Included within this sector are
entities such as publicly owned utilities and other entities that trade in goods
and services.
21. Statistical bases of financial reporting define:
(a) Corporations as legal entities created for the purpose of producing
goods and services for the market;
(b) Quasi-corporations as enterprises that are not incorporated or
otherwise legally established, but function as if they were corporations;
and
(c) Nonprofit institutions as legal or other entities that produce or
distribute goods and services, but which do not generate financial gain
for their controlling entity.
22. A GBE as defined in this Standard has similar characteristics to a public
corporation or public quasi-corporation, as defined in statistical bases of
financial reporting. However, there may not be an identical mapping of GBEs
and the PFC and PNFC sectors. For example, a GBE that is not resident
would not be classified as a PFC or a PNFC.

Accounting Policies
23. Financial information about the GGS shall be disclosed in conformity
with the accounting policies adopted for preparing and presenting the
consolidated financial statements of the government, except as required
by paragraphs 24 and 25.
24. In presenting financial information about the GGS, entities shall not
apply the requirements of IPSAS 6, Consolidated and Separate Financial
Statements, in respect of entities in the PFCs and public NFCS sectors.
25. The GGS shall recognize its investment in the PFC and public NFCS
sectors as an asset, and shall account for that asset at the carrying
amount of the net assets of its investees.
26. This Standard reflects the view that the consolidated financial statements of a
government that elects to disclose information about the GGS are to be
disaggregated to present the GGS as one sector of the government reporting
entity. Consistent with this view, this Standard requires that the same
definitions and the same recognition, measurement, and presentation
requirements that are applied when preparing the consolidated financial
statements are also applied to the GGS disclosures, with one exception. That

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exception is that the requirements of IPSAS 6 are not applied in respect of the
relationship of the GGS sector with entities in the PFC and PNFC sectors.
27. IPSAS 6 requires controlling entities to prepare financial statements that
consolidate controlled entities on a line-by-line basis. IPSAS 6 also contains
(a) a detailed discussion of the concept of control as it applies in the public
sector, and (b) guidance on determining whether control exists for financial
reporting purposes. Consistent with the requirements of IPSAS 6, entities in
the PFC and PNFC sectors, as defined in statistical bases of financial
reporting, that are controlled entities of the government will be consolidated
in the government’s financial statements.
28. Financial statements prepared consistent with statistical bases of financial
reporting portray the impact of the GGS on the public sector as a whole and,
in the context of the SNA 93 (and updates), on a national economy.
Consistent with that focus, statistical bases of financial reporting require the
GGS financial statements to present public sector entities outside that sector
as investments in other sectors. In addition, under statistical bases of financial
reporting, transactions of the GGS with entities in other sectors are not
eliminated from the statement of government operations or a similar
statement.
29. To apply the IPSAS 6 requirements for consolidation to the GGS would result
in the re-presentation of the consolidated financial statements of a
government, rather than the GGS financial statements.
30. Therefore, in disclosing financial information about the GGS, balances and
transactions between entities within the GGS are eliminated in accordance
with IPSAS 6. However, balances and transactions between entities in the
GGS and entities in other sectors are not eliminated.
31. This Standard requires the GGS sector to recognize its investment in entities
in the PFC or PNFC sectors at the carrying amount of the net assets of those
entities. This will ensure that the GGS disclosures reflect a disaggregation of
financial information presented in the consolidated financial statements of the
government of which it is a part. Consistent with the GGS being a
disaggregation of the consolidated financial statements of a government,
changes in the carrying amount of the net assets of those entities will be
recognized in the same manner as they are recognized in the consolidated
financial statements of a government.
32. Statistical bases of reporting require all assets and liabilities (except loans) to
be revalued to market value at each reporting date. IPSASs include different
measurement requirements, and require or permit cost and current values for
certain classes of assets and liabilities. They do not require all assets and
liabilities to be revalued to market value. Therefore, the measurement of
assets and liabilities in the GGS disclosures in the financial statements,

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including the investment in the PFC and PNFC sectors, may differ from the
measurement basis adopted in statistical bases of reporting.

Further Disaggregation
33. In some jurisdictions, national governments may control provincial and/or
local governments and, consequently, the national government’s financial
statements will consolidate different levels of government. If financial
statements consolidate different levels of government, further disaggregation
of the consolidated financial statements may occur in accordance with the
requirements of this Standard to separately disclose information about the
GGS at each level of government.
34. This further disaggregation is not required by this Standard. However, it may
be presented to further assist users to better understand the relationship
between the GGS activities of each level of government consolidated in the
financial statements, and the relationship between financial statements and
the statistical bases of financial reporting in those jurisdictions.

Disclosures
35. Disclosures made in respect of the GGS shall include at least the
following:
(a) Assets by major class, showing separately the investment in other
sectors;
(b) Liabilities by major class;
(c) Net assets/equity;
(d) Total revaluation increments and decrements and other items of
revenue and expense recognized directly in net assets/equity;
(e) Revenue by major class;
(f) Expenses by major class;
(g) Surplus or deficit;
(h) Cash flows from operating activities by major class;
(i) Cash flows from investing activities; and
(j) Cash flows from financing activities.
The manner of presentation of the GGS disclosures shall be no more
prominent than the government’s financial statements prepared in
accordance with IPSASs.
36. IPSAS 1 identifies a complete set of financial statements (under the accrual
basis) as a statement of financial position, statement of financial performance,

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statement of changes in net assets/equity, cash flow statement, and accounting

policies and notes to the financial statements.
37. This Standard requires disclosure of the major classes of assets, liabilities,
revenues, expenses, and cash flows reflected in the financial statements. This
Standard does not specify the manner in which the GGS disclosures shall be
made. Governments electing to make GGS disclosures in accordance with
this Standard may make such disclosures by way of (a) note disclosure, (b)
separate columns in the primary financial statements, or (c) otherwise, as
considered appropriate in their jurisdiction. However, the manner of
presentation of the GGS disclosures will be no more prominent than the
consolidated financial statements prepared in accordance with IPSASs.
38. To assist users to understand the relationship of financial information
presented for the GGS to a government’s operations, statistical bases of
financial reporting require total government expenses to be disaggregated and
disclosed by class, based on either the economic nature of the expenses or by
the Classification of Functions of Government (COFOG). This Standard does
not require nor prohibit entities disclosing GGS information from presenting
disaggregated GGS information classified by economic nature or consistent
with the COFOG classification basis. In some jurisdictions, the COFOG
classifications adopted in respect of the GGS disclosures may be similar to
the classifications adopted in accordance with IPSAS 18.
39. Entities will also make any additional disclosures that are necessary for users
to understand the nature of the information presented.
40. Entities preparing GGS disclosures shall disclose the significant
controlled entities that are included in the GGS, and any changes in those
entities from the prior period, together with an explanation of the
reasons why any such entity that was previously included in the GGS is
no longer included.
41. This Standard requires entities electing to disclose information about the GGS
to disclose a list of the significant controlled entities that are included in the
GGS. IPSAS 6 requires entities preparing consolidated financial statements to
disclose a list of the significant controlled entities that are included in the
consolidated financial statements. Disclosure of which of the entities
consolidated in the financial statements in accordance with IPSAS 6 are
included in the GGS will assist users in developing an understanding of the
relationship between information about the government and its GGS, and in
better understanding the GGS information itself.
42. Similarly, disclosure of changes in the controlled entities included in the GGS
will enable users to monitor the relationship between the consolidated
financial statements and the GGS information over time.

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Reconciliation to the Consolidated Financial Statements
43. The GGS disclosures shall be reconciled to the consolidated financial
statements of the government, showing separately the amount of the
adjustment to each equivalent item in those financial statements.
44. This Standard requires the amounts disclosed in respect of the GGS to be
reconciled to their equivalent amounts in the consolidated financial
statements of the government. Entities will present separately the adjustment
in the amount of the asset investment in PFC and PNFC sectors determined in
accordance with paragraph 23, and adjustments to each of the items disclosed
separately in accordance with paragraph 35. In addition, entities may, but are
not required to, disclose separately the amount of the adjustment to each item
attributable to the PFC and the PNFC sectors. This reconciliation will enable
the government to better discharge its accountability obligations by
demonstrating the relationship between the amounts of each item for the GGS
with the total amount of that item for the government.

Reconciliation to Statistical Bases of Financial Reporting

45. Statistical bases of financial reporting and IPSASs have many similarities in
their treatment of particular transactions and events. However, there are also
differences. For example, in addition to differences in the measurement bases
for assets and liabilities outlined in paragraph 32 above, statistical bases of
financial reporting treat dividends as expenses, while IPSASs treat them as
distributions. Statistical bases of financial reporting also make a distinction
between transactions and other economic flows for presentation of financial
information that is not currently reflected in the consolidated financial
statements, and focus on particular measures relevant for analysis of fiscal
policy such as net lending/borrowing and cash surplus/deficit.
46. This Standard does not require a reconciliation of the GGS disclosures in the
consolidated financial statements with the GGS disclosures under statistical
bases of financial reporting. This is because of concerns about the
practicability, and the costs and benefits, of such a requirement in all
jurisdictions. However, the inclusion of such a reconciliation by way of note
disclosure is not precluded.

Effective Date
47. An entity shall apply this Standard for annual financial statements
covering periods beginning on or after January 1, 2008. Earlier
application is encouraged. If an entity applies this Standard for a period
beginning before January 1, 2008, it shall disclose that fact.

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48. When an entity adopts the accrual basis of accounting as defined by IPSASs
for financial reporting purposes subsequent to this effective date, this
Standard applies to the entity’s annual financial statements covering periods
beginning on or after the date of adoption.

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Basis for Conclusions
This Basis for Conclusions accompanies, but is not part of, IPSAS 22.
Introduction
BC1. The System of National Accounts 1993 (SNA 1993) (and updates),
Government Finance Statistics Manual 2001 (GFSM) 2001, and the
European System of Accounts 1995 (ESA 1995), all require governments to
publish financial information about the GGS. For statistical purposes, the
GGS comprises government-controlled entities primarily engaged in
nonmarket activities. The GGS is sometimes described as comprising those
entities that fulfill the core functions of government as their primary activity.
The GGS does not include public corporations, even when all the equity of
such corporations is owned by the government or government entities.
BC2. Current IPSASs do not require entities to disclose information about the GGS
in their financial statements. IPSASs require entities to prepare financial
statements that include information about all the resources controlled by the
reporting entity, and prescribe rules for consolidation of all controlled
entities. IPSAS 18, Segment Reporting, also requires entities to identify
segments and present information about those segments.
BC3. Some governments prepare, present, and widely publish both financial
statements and information about the financial characteristics and
performance of the public sector prepared in accordance with statistical bases
of reporting.
BC4. The IPSASB supports the convergence of IPSASs with statistical bases of
reporting where appropriate. The statistical community encouraged the
IPSASB to develop an IPSAS addressing the presentation of GGS
information as part of a government’s consolidated financial statements as a
means of facilitating convergence.
BC5. The disclosure of GGS information can provide useful information to users of
financial statements, particularly in those jurisdictions in which national or
other governments publish both (a) financial statements in accordance with
IPSASs, and (b) financial information in accordance with statistical bases of
financial reporting. The IPSASB is also of the view that the disclosure of
such information can assist users in better understanding the relationship
between the market and nonmarket activities of the government. However,
the IPSASB is not persuaded that the benefits of making such disclosures
may be significantly greater than their costs in those jurisdictions where
financial statements prepared in accordance with statistical bases of financial
reporting are not routinely prepared and made publicly available.
Consequently, these disclosures are not mandatory.
BC6. This Standard specifies requirements for application only by governments.
This is because it is only possible to disclose a meaningful representation of
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the GGS for a government as a whole. In some jurisdictions, national

governments may control provincial and/or local governments. Where this
occurs, the financial statements may be further disaggregated to separately
disclose information about the GGS for each level of government. Such
disclosure is likely to assist users to better understand the relationship
between the GGS activities of each level of government. However, in some
jurisdictions, such disclosures may impose additional pressure on the
accounting system and those responsible for data collection and aggregation,
and it is not clear that the benefits of such disclosure for users of the financial
statements will exceed their cost. Therefore, this Standard does not require
entities that elect to disclose information about the GGS to also disclose
separately information about the GGS of each level of government
consolidated in the financial statements. However, such disclosures are not
precluded.

Consolidation and Disaggregation

BC7. Statistical bases of financial reporting and IPSASs have many similarities in
their treatment of particular transactions and events. However, there are also
differences. For example, statistical bases of financial reporting:
(a) Require all assets and liabilities (except loans) to be revalued to market
value at each reporting date. IPSASs include different measurement
requirements, and require or permit cost and current values for certain
classes of assets and liabilities;
(b) Treat dividends as expenses, while IPSASs treat them as distributions;
(c) Make a distinction between transactions and other economic flows for
presentation of financial information. IPSASs do not currently make a
similar distinction; and
(d) Focus on the presentation of financial information about the GGS and
the other sectors of the public sector as separate components and, in
this context, adopt the same rules for recognition and measurement as
are adopted for presentation of the rest of the economy, to ensure
consistency of the macro-economic totals. Under statistical bases of
financial reporting, financial statements prepared for the GGS do not
include consolidation of PNFCs, being government-controlled entities
that trade in goods and services, and PFCs such as banks. The IPSASs
focus on consolidated financial statements which present financial
information about all the assets, liabilities, revenues, expenses, and
cash flows controlled by the entity.
BC8. This Standard requires that the disclosure of information about the GGS be a
disaggregation of a government’s consolidated financial statements. This is a
similar perspective that is adopted for disclosure of segment information in
accordance with IPSAS 18. Accordingly, the same accounting policies as

IPSAS 22 BASIS FOR CONCLUSIONS 702

 DISCLOSURE OF FINANCIAL INFORMATION
ABOUT THE GENERAL GOVERNMENT SECTOR

PUBLIC SECTOR
those adopted for the consolidated financial statements are to be adopted in
making GGS disclosures, with one exception as noted below.
BC9. When GGS disclosures are made in financial statements, the requirements of
IPSAS 6 should not be applied in respect of PFCs and PNFCs. This is
because the application of IPSAS 6 to the PFC and PNFC sectors would
result in the re-presentation of a government’s consolidated financial
statements rather than the GGS financial statements. This would defeat the
purpose of the disclosure of GGS information as a bridge between financial
statements prepared in accordance with IPSASs and those prepared in
accordance with statistical bases of financial reporting.

Segment Reporting
BC10. IPSAS 18 requires the separate disclosure of certain information about
significant activities or groups of activities for the evaluation of the
performance of the entity in achieving its objectives, and for decision-making
purposes. IPSAS 18 does not distinguish between exchange and non-
exchange transactions and events, or market and nonmarket activity of
government. Rather, its focus is on the disclosure of the revenues, expenses,
assets, and liabilities associated with the delivery of major services or groups
of services – whether these services are delivered by the GGS of the
government or by PFCs and PNFCs. The objective of segment reporting is
not achieved by the disclosure of information about the GGS. Accordingly, a
government electing to disclose information about the GGS needs also to
disclose information about segments.
BC11. Statistical bases of financial reporting present information about expenses or
expenditure of the government, classified either by economic nature or the
COFOG. Either of these classification bases may be applied to disclose
additional information about the GGS. In some cases a COFOG classification
may be adopted to disclose segment information in a government’s
consolidated financial statements.

Reconciliation
BC12. The information disclosed about the GGS in accordance with the
requirements of this Standard may differ in content and form from that
presented under statistical bases of financial reporting.
BC13. The IPSASB considered whether those governments that elect to disclose
information about the GGS in accordance with this Standard should be
required to disclose a reconciliation of (a) the GGS disclosures in the
financial statements, and (b) the GGS disclosures under statistical bases of
financial reporting. The IPSASB was concerned that such a requirement may
impose significant costs on the preparer, and that those costs may be greater
than the benefits in some jurisdictions. This would then discourage
governments that might otherwise elect to make such disclosures. Of
703 IPSAS 22 BASIS FOR CONCLUSIONS
 DISCLOSURE OF FINANCIAL INFORMATION
ABOUT THE GENERAL GOVERNMENT SECTOR

particular concern to the IPSASB in this respect was, for example, whether
the:
(a) Timing of compilation of financial statements and statistical
information is such that a reconciliation could be completed within the
timeframe necessary for the financial statements to be audited and
signed off or authorized for issue in accordance with legislative
requirements and/or requirements of the IPSASs;
(b) Inclusion of such a requirement would trigger an audit of the
reconciliation, and may also trigger an audit of the statistical reports
themselves; and
(c) Entity may be required to remeasure and reclassify assets, liabilities,
revenues, and expenses in accordance with the requirements of the
statistical bases of financial reporting, and whether this would
discourage disclosure of the GGS information.
BC14. On balance, the IPSASB concluded that such a reconciliation should not be
required at this stage. However, a reconciliation of the GGS disclosures,
presented in accordance with the requirements of this Standard to the
equivalent items in the financial statements of the government prepared in
accordance with the requirements of IPSASs, (a) is consistent with enhanced
transparency, (b) is not onerous, and (c) would be useful to users. The
disclosure of a reconciliation of the GGS disclosures presented in accordance
with the requirements of this Standard and the GGS disclosures presented
under statistical bases of financial reporting is not prohibited.

IPSAS 22 BASIS FOR CONCLUSIONS 704

 DISCLOSURE OF FINANCIAL INFORMATION
ABOUT THE GENERAL GOVERNMENT SECTOR

PUBLIC SECTOR
Implementation Guidance
This guidance accompanies, but is not part of, IPSAS 22.
Illustrative Financial Statement Structure
Government A—Extract Of Financial Statements
Extract from the Notes to the Financial Statements
Note: General Government Sector (GGS) Disclosures
The following disclosures are made for the general government sector (GGS). They
reflect the accounting policies adopted in the consolidated financial statements,
except that the consolidation requirements have been varied in respect of the public
financial corporations (PFCs) sector and public nonfinancial corporations (PNFCs)
sector. In accordance with the requirements of IPSAS 22, Disclosure of Financial
Information about the General Government Sector, PFCs and PNFCs are not
consolidated in the GGS disclosures, but are recognized as investments of the GGS.
The investments in PFCs and PNFCs are presented as a single line item, measured at
the carrying amount of the net assets of the investees.
The GGS comprises all central government ministries and other entities controlled
by the government that are primarily engaged in nonmarket activities. These entities
are:
Ministry of x

y
z.
During the reporting period, activities related to the postal service, previously
undertaken by the ministry of communications, have been reconstituted on a
commercial basis and are no longer included in the financial information presented
for the GGS.

705 IPSAS 22 IMPLEMENTATION GUIDANCE

 DISCLOSURE OF FINANCIAL INFORMATION
ABOUT THE GENERAL GOVERNMENT SECTOR

Statement of Financial Position for the GGS—

As At December 31, 20X2
(in thousands of currency units)
GGS PFC and PNFC Eliminations Total W-of-G
20X2 20X1 20X2 20X1 20X2 20X1 20X2 20X1
ASSETS
Current assets
Cash and cash equivalents X X X X (X) (X) X X
Receivables X X X X (X) (X) X X
Inventories X X X X X X
Prepayments X X X X (X) (X) X X
Investment X X X X X X
Other current assets X X X X X X
X X X X (X) (X) X X
Non-current assets
Receivables X X X X (X) (X) X X
Investments X X X X X X
Investment in other sectors X X (X) (X)
Other financial assets X X X X (X) (X) X X
Infrastructure, plant, and
equipment X X X X X X
Land and buildings X X X X X X
Intangible assets X X X X X X
Other non-financial assets X X X X X X

X X X X (X) (X) X X
TOTAL ASSETS X X X X (X) (X) X X

LIABILITIES
Current liabilities
Payables X X X X (X) (X) X X
Short-term borrowings X X X X X X
Current portion of X X X X X X
borrowings
Provisions X X X X X X
Employee benefits X X X X X X
Other current liabilities X X X X (X) (X) X X

IPSAS 22 IMPLEMENTATION GUIDANCE 706

 DISCLOSURE OF FINANCIAL INFORMATION
ABOUT THE GENERAL GOVERNMENT SECTOR

PUBLIC SECTOR
GGS PFC and PNFC Eliminations Total W-of-G
20X2 20X1 20X2 20X1 20X2 20X1 20X2 20X1
X X X X (X) (X) X X
Non-current liabilities
Payables X X X X (X) (X) X X
Borrowings X X X X X X
Provisions X X X X X X
Employee benefits X X X X X X
Other liabilities X X X X (X) (X) X X
X X X X (X) (X) X X
TOTAL LIABILITIES X X X X (X) (X) X X

NET ASSETS X X X X (X) (X) X X

NET ASSETS/EQUITY
Reserves X X X X (X) (X) X X
Accumulated surpluses/
(deficits) X X X X (X) (X) X X
X X X X (X) (X) X X
TOTAL NET ASSETS/
EQUITY X X X X (X) (X) X X

707 IPSAS 22 IMPLEMENTATION GUIDANCE

 DISCLOSURE OF FINANCIAL INFORMATION
ABOUT THE GENERAL GOVERNMENT SECTOR

Statement of Financial Performance for the GGS—

For Year Ended December 31, 20X2—Classification of Function of Government
(in thousands of currency units)
GGS PFC and PNFC Eliminations Total W-of-G
20X2 20X1 20X2 20X1 20X2 20X1 20X2 20X1
Revenue
Taxes X X (X) (X) X X
Fees, fines, penalties X X X X (X) (X) X X
Revenue from other
sectors X X X X (X) (X)
Transfers from other
governments X X X X X X
Other operating revenue X X X X (X) (X) X X
Total revenue X X X X (X) (X) X X

Expenses
General public services X X X X
Defense X X X X
Public order and safety X X X X X X
Economic affairs X X X X
Environmental
protection X X X X (X) (X) X X
Housing and community
amenities X X X X (X) (X) X X
Health X X X X X X
Recreational, cultural,
and religious X X X X
Education X X X X (X) (X) X X
Social protection X X X X (X) (X) X X
Total expenses X X X X (X) (X) X X

Surplus/(deficit) for the

period X X X X (X) (X) X X

IPSAS 22 IMPLEMENTATION GUIDANCE 708

 DISCLOSURE OF FINANCIAL INFORMATION
ABOUT THE GENERAL GOVERNMENT SECTOR

PUBLIC SECTOR
Statement of Financial Performance for the GGS—
For Year Ended December 31, 20X2—Economic Classification of Expense
(Alternative Presentation Method)
(in thousands of currency units)
GGS PFC and PNFC Eliminations Total W-of-G
20X2 20X1 20X2 20X1 20X2 20X1 20X2 20X1
Revenue
Taxes X X (X) (X) X X
Fees, fines, penalties X X X X (X) (X) X X
Revenue from other
sectors X X X X (X) (X)
Transfers from other
governments X X X X X X
Other operating revenue X X X X (X) (X) X X
Total revenue X X X X (X) (X) X X

Expenses
Compensation of
Employees X X X X (X) (X) X X
Use of Goods and
Services X X X X (X) (X) X X
Consumption of Fixed
Capital X X X X (X) (X) X X
Interest X X X X (X) (X) X X
Subsidies X X X X (X) (X) X X
Social Benefits X X X X (X) (X) X X
Other Expense X X X X X X
Total expenses X X X X (X) (X) X X

Surplus/(deficit) X X X X (X) (X) X X

709 IPSAS 22 IMPLEMENTATION GUIDANCE

 DISCLOSURE OF FINANCIAL INFORMATION
ABOUT THE GENERAL GOVERNMENT SECTOR

Statement of Changes in Net Assets/Equity for the GGS—

For The Year Ended December 31, 20X2
(in thousands of currency units)
GGS
Accumu-
Reval- Trans- lated
uation lation Surpluses PFC and Elim- Total
Reserve Reserve /(Deficits) PNFC inations W-of-G
Balance at December 31, X (X) X X X X
20X0

Surplus on revaluation of X X X
property
Deficit on revaluation of (X) (X) X (X)
investments
Currency translation (X) (X) (X)
differences
Net gains and losses not X (X) X (X) X
recognized in the
statement of financial
performance

Net surplus for the X X (X) X

period

Balance at December 31, X (X) X X (X) X

20X1

Deficit on revaluation of (X) (X) X (X)

property
Surplus on revaluation of X X (X) X
investments
Currency translation (X) X X
differences
Net gains and losses not (X) (X) (X) (X) (X)
recognized in the
statement of financial
performance

Net deficit for the period (X) (X) (X) (X)

Balance at December 31, X (X) X X (X) X

20X2

IPSAS 22 IMPLEMENTATION GUIDANCE 710

 DISCLOSURE OF FINANCIAL INFORMATION
ABOUT THE GENERAL GOVERNMENT SECTOR

PUBLIC SECTOR
Cash Flow Statement for the GGS -
For Year Ended December 31, 20X2
(in thousands of currency units)
PFC and Total
GGS PNFC Eliminations W-of-G

20X2 20X1 20X2 20X1 20X2 20X1 20X2 20X1

CASH FLOWS FROM
OPERATING ACTIVITIES
Receipts

Taxation X X (X) (X) X X

Sales of goods and services X X (X) (X) X X

Grants X X (X) (X) X X

Interest received X X X X

Dividends from other sectors

to government X X (X) (X)

Other receipts X X X X (X) (X) X X

Payments

Employee costs (X) (X) (X) (X) (X) (X)

Retirement Benefits (X) (X) (X) (X) (X) (X)

Suppliers (X) (X) (X) (X) (X) (X)

Interest paid (X) (X) (X) (X) (X) (X)

Dividend to other sectors (X) (X) X X

Other payments (X) (X) (X) (X) X X (X) (X)

Net cash flows from operating

activities X X X X (X) (X) X X

CASH FLOWS FROM

INVESTING ACTIVITIES

Purchase of plant and equipment (X) (X) (X) (X) (X) (X)
Proceeds from sale of plant and
equipment X X X X X X

Proceeds from sale of investments X X X X X X

Purchase of foreign currency

securities (X) (X) (X) (X) (X) (X)

711 IPSAS 22 IMPLEMENTATION GUIDANCE

 DISCLOSURE OF FINANCIAL INFORMATION
ABOUT THE GENERAL GOVERNMENT SECTOR

PFC and Total

GGS PNFC Eliminations W-of-G

20X2 20X1 20X2 20X1 20X2 20X1 20X2 20X1

Net cash flows from investing
activities (X) (X) (X) (X) (X) (X) (X) (X)

CASH FLOWS FROM

FINANCING ACTIVITIES

Proceeds from borrowings X X X X X X

Repayment of borrowings (X) (X) (X) (X) (X) (X)

Net cash flows from financing

activities X X X X (X) (X) X X

Net increase/(decrease) in cash and

cash equivalents X X X X (X) (X) X X

Cash and cash equivalents at

beginning of period X X X X (X) (X) X X

Cash and cash equivalents at end

of period X X X X (X) (X) X X

IPSAS 22 IMPLEMENTATION GUIDANCE 712