Semester 1, 2022
Assessment Item – Case Study Part 1 – Discussion Due to 4pm Friday 6 April
Peer Review Due 4 pm Friday 19 April
International Public Sector Accounting Standards Board (IPSASB) published a consultation paper titled
“Financial reporting for heritage in the public sector” in 2017. In the consultation paper, IPSASB describes heritage as special items “that are intended to be held indefinitely and preserved for the benefit of present and future generations because of their rarity and/or significance in relation, but not limited, to their archaeological, architectural, agricultural, artistic, cultural, environmental, historical, natural, scientific or technological features” (IPSASB, 2017)
You as an accountant, based on your interpretation of the Accounting Standards and Conceptual Framework, discuss “should heritage assets in the public sector be recognized in the balance sheet
of financial statement?” Some research papers have been provided that may be helpful. You may use these references in you
submission if you choose but are also encouraged to research more
oadly and find your own
eferences.
Required:
1. Prepare a discussion and address the question: “should heritage assets in the public sector be recognized in the balance sheet of financial statement?”. In your response, you should address both sides of the argument i.e., why it should be recognized and why it shouldn’t be recognized (with appropriate references), before coming to your own
conclusion. Please write the discussion in a professional manner and you may use accounting terminology.
Note: please paraphrase your arguments, do not directly copy the arguments from research papers or online materials (which may lead to plagiarism and a
each of academic integrity).
Apart from the materials provided for you also search for at least one more research paper so you are expected to use at least 4 research papers for your discussion.
2. Your discussion should be referenced appropriately. References should be provided both in-
text and as a post-script to your discussion.
3. Your discussion must not exceed 1,500 words (including references)
Second Part
You will then be required to provide feedback to two or three of your peers, based on the ru
ic provided. You will be assessed on both your original submission and on the quality of your feedback, which will be evaluated by the teaching staff.
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Public Money & Management
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Heritage assets in the due process of the
International Public Sector Accounting Standards
Board (IPSASB)
Anschi De Wolf, Johan Christiaens & Natalia Aversano
To cite this article: Anschi De Wolf, Johan Christiaens & Natalia Aversano XXXXXXXXXXHeritage assets
in the due process of the International Public Sector Accounting Standards Board (IPSASB), Public
Money & Management, 41:4, XXXXXXXXXX, DOI: XXXXXXXXXX/ XXXXXXXXXX1727114
To link to this article: https:
doi.org/10.1080/ XXXXXXXXXX1727114
Published online: 17 Feb 2020.
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Heritage assets in the due process of the International Public Sector Accounting
Standards Board (IPSASB)
Anschi De Wolf a, Johan Christiaens a and Natalia Aversano
aGhent University, Belgium; bUniversity of Basilicata, Italy
ABSTRACT
This paper assesses whether the IPSASB’s consultation paper (CP), ‘Financial Reporting fo
Heritage in the Public Sector’ might actually end academic debates about how to report on
heritage assets. Similarities and differences in the position of the IPSASB, previous academic
literature and the CP’s respondents are examined by the authors. IPSASB proposed that
heritage be recognized and measured in financial statements, whereas the academic
literature has supported reporting largely through disclosure notes. Most respondents agreed
with the IPSASB, but raised the same difficulties as discussed in the academic literature. The
espondents were mainly public sector entities and professional associations, mostly from
Europe, Oceania and Africa. Though the CP asks the right questions, it does not provide the
needed guidance which indicates it will not be able to end the ongoing debate.
IMPACT
This research offers fresh knowledge about financial reporting on heritage items, offering
financial statement users and preparers information about possible future stages of heritage
accounting policy. The paper will be useful for policy- and decision-makers, as well as the
standard setting boards (SSBs). It provides insight into respondents’ behaviour in
consultation processes and the influence of a respondent’s background on participation,
which should help SSBs improve their consultation processes. First steps were made
egarding research into the influence of different variables (for example geographical
locations, affiliation and legislative background) on opinions regarding the topic of the CP.
This paper points the way forward for new discussions about accounting for heritage.
KEYWORDS
Comment letter; consultation
paper; heritage assets;
IPSASB; recognition;
stakeholder participation
Introduction
In 2017 the International Public Sector Accounting
Standards Board (IPSASB) published the consultation
paper (CP) Financial Reporting for Heritage in the
Public Sector. ‘Heritage’ consists of special items that
have an infinite lifespan, need to be preserved and
are not kept for economic reasons (for example
historic buildings). They usually need funding (fo
example for maintenance), which makes them
complex to report on (Aversano & Christiaens, 2014).
The CP’s purpose was to understand stakeholders’
views in order to improve financial reporting fo
heritage assets by public sector entities. Additionally,
they wanted to support the comparability of
heritage-related information in general purpose
financial reports (GPFRs), while providing information
that users need for accountability and decision-
making (IPSASB, 2017a).
In the CP, IPSASB proposes following description of
heritage items:
Items that are intended to be held indefinitely and
preserved for the benefit of present and future
generations because of their rarity and/or significance
in relation, but not limited, to their archaeological,
architectural, agricultural, artistic, cultural,
environmental, historical, natural, scientific o
technological features (IPSASB, 2017a).
Generally, heritage items are seen as assets even if they
do not have the generation of future economic
enefits as their goal. The IPSASB’s decision to begin
with ‘heritage items’ provided scope to explicitly
consider whether (and to what extent) they could be
assets for financial reporting purposes. Many
discussions of financial reporting for heritage begin
with the term ‘heritage asset’ (HA). However, this
implies that heritage necessarily complies with the
definition of an asset and must therefore be included
in the financial statements (Ellwood, XXXXXXXXXXThe
IPSASB defines assets as ‘resources presently
controlled by the entity as a result of a past event’
(IPSASB, 2017a). These resources are items with
service potential or the ability to generate economic
enefits. Some HAs can tick all these boxes, but this
is not the case for most heritage items, which leads
to disputes on how to financially report them.
Financial reporting for heritage is the subject of
much debate. We are not just adding yet anothe
opinion to the discussion—instead we assess
whether this CP might be the first step in ending the
debate. To this end, it examines whether the views of
© 2020 Informa UK Limited, trading as Taylor & Francis Group
PUBLIC MONEY & MANAGEMENT
2021, VOL. 41, NO. 4, 325–335
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the majority of academics based on academic research,
the IPSASB’s preliminary views in the CP and the input
provided by respondents align. If there is alignment,
this could lead to an accounting standard which
every stakeholder could support.
Context for the IPSASB’s CP
Since the development of the first IPSASs, the problem
of how to financially report heritage has been
unresolved. The most controversial issue raised by
espondents to the exposure draft (ED) 14 Property,
Plant and Equipment XXXXXXXXXXwas whether heritage and
cultural assets should be recognized and could be
eliably measured. The Public Sector Committee
(PSC), IPSASB’s predecessor, agreed that all property,
plant and equipment (including HAs) should be
ecognised. However, in the final standard (IPSAS 17)
the recognition of HAs was not required (IPSASB,
2001). IPSAS 17 merely states that, if public secto
entities decide to recognize HAs, they must comply
with IPSAS 17’s disclosure requirements. Furthermore,
IPSAS 17 does not restrict entities’ measurement of
HAs (IPSASB, XXXXXXXXXXSince this regulation led to a
variety of reporting practices, the IPSASB collaborated
with the UK’s Accounting Standards Board (ASB) to
produce Accounting for Heritage Assets under the
Accrual Basis of Accounting XXXXXXXXXXUnfortunately, this
did not resolve the issues and the IPSASB defe
ed
further work on heritage until after the completion of
its Conceptual Framework for General Purpose
Financial Reporting by Public Sector Entities (CF).
Since then, the IPSASB has continued to struggle with
heritage within several different IPSASB initiatives.
As heritage items can be intangible assets (fo
example rituals), the publication of IPSAS 31
Intangible Assets XXXXXXXXXXcould have given furthe
guidance. However, IPSAS 31 allowed preparers to
decide whether or not they would recognize HAs. In
2011, an ED on Key Characteristics of the Public Secto
with Potential Implications for Financial Reporting was
published, which acknowledged that public secto
entities can have extensive responsibilities fo
national and local heritage, including protection and
preservation. The ED discussed the issue of
ecognizing heritage as assets, but did not offer any
solutions.
After this ED, the IPSASB did not publish anything
that focused exclusively on financial reporting of
heritage until the CP in 2017. However, it was
considered during development of the IPSASB’s CF
project, which ran from 2006 to 2014. The IPSASB’s
finalized CF XXXXXXXXXXstates that public sector entities
may hold items of historical and cultural character, as
well as areas of natural significance, that are not
generally held for sale and have service potential.
They are responsible for preserving and maintaining
them for cu
ent and future generations. They are
called ‘public sector assets’. The CF discusses
measurement issues relevant to HAs. Symbolic value
is often proposed as an appropriate measurement
asis. However, the IPSASB decided to exclude
symbolic value from its list of measurement bases
applicable to assets on the grounds that symbolic
values do not provide relevant information on
financial capacity, operational capacity or the cost of
services and therefor do not meet the measurement
objective. The IPSASB accepted that in cases where it
is impossible or very costly to obtain a valuation, it is
important that the information provided through
disclosures is carefully considered at standards level.
With the completion of its CF, the IPSASB could once
again consider financial reporting for heritage, with
this topic remaining a priority from stakeholders’
perspective. The IPSASB initiated a new heritage
project in the second half of 2015.
Eventually, the IPSASB published the