IPSAS Implementation

Most governments around the world have either or are currently in the process of implementing the IPSAS standards. As a result, they will need to initially identify, capture, record and value their assets in accordance with the IPSAS accounting standards. Even after initial recognition the valuations will need to be regularly maintained. Our extensive experience shows that the most cost-effective way to keep valuations up-to-date is to undertake a comprehensive revaluation every three years with desktop updates done in the intervening years.

 

The types of assets will include land, buildings, public and commercial infrastructure assets. These assets may be held by :-

 

  • Departments

  • Government Owned Business Enterprises or Corporations (GBEs/GOCs)

  • Agencies

  • Local Governments

  • Municipal Governments

  • Provincial Governments

 

The implementation of IPSAS for the first time is an enormous challenge and will take time. It will involve significant changes to existing financial systems as well as extensive education and training. One of the biggest challenges will be the identification of assets followed by the capture of key data and subsequent revaluation. While Asset Valuer Pro is primarily a provider of a software solution to enable governments to quickly and cost effectively satisfy this need, through our strategic partners, we also deliver complete asset accounting and asset management frameworks globally. This involves the development of - 

  • Training manuals for asset accounting under IPSAS accrual

  • Training manuals on the link between corporate governance and asset management

  • Non-Current Asset Policies

  • Valuation Methodology and associated detailed guides

  • Asset Hierarchies

  • Training of local teams in data capture, accounting standards and valuation

Some recent examples include major projects for - 

  • Government of Vanuatu

  • Government of Fiji

  • Royal Government of Cambodia

 

Due to the lack of existing knowledge and capability governments have traditionally relied on external consultants to undertake the data capture and valuation of these assets. However, this traditionally is very expensive, produces inconsistent results and fails to build any capability with the government. As shown with the Government of Cambodia the cost of building an internal team using Asset Valuer Pro provides a far more cost effective solution.

 

Asset Valuer Pro however provides a real alternative resulting in significantly lower costs while also creating capability within government staff as demonstrated by the Government of Vanuatu. Despite the lack of any qualified staff a small team was trained and were able to use Asset Valuer Pro to identify, capture and value the whole-of-government assets in full accordance with the IPSAS standards.

 

Asset Valuer Pro can be provided at the individual entity level for specific agencies or at a group level. For example: the government (via Ministry of Finance or Valuer-General) could acquire a ‘group’ licence which would enable every entity within the whole-of-government or to capture the assets and produce valuations using Asset Valuer Pro. The Auditor-General in turn would have full online access to all valuations and the government could ensure consistency of methodology across all entities and asset classes. Such an approach would result in significant cost savings as well as ensuring consistency of valuations.

 

In this scenario Asset Valuer Pro would work with the government to develop a tailored training and mentoring program using out international financial reporting experts to build the in-house capability of the government staff.

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