The International Public Sector Accounting Standards Board has published a paper questioning how financial statements can provide more information about the long-term sustainability of current government programs.
There is a growing understanding that future generations of taxpayers will have to deal with the fiscal consequences of current government policies, the board noted. Concerns about the ability of governments to meet future service delivery and financial commitments for health, pensions, debt-servicing, and other obligations have long existed, but have increased in the current economic environment.
Uncertainty over the long-term financial consequences of government interventions, including the bailouts and stimulus packages that have characterized the global financial crisis, has added another dimension to concerns over the long-term sustainability of public finances in many countries. The board, which operates under the auspices of the International Federation of Accountants, is trying to address such questions with its new consultation paper, Reporting on the Long-Term Fiscal Sustainability of Public Finances.
The need for understandable information on the long-term sustainability of all governmental programs has become increasingly apparent from the work that the IPSASB has carried out in developing its own public sector conceptual framework and on accounting for social benefits, said IPSASB chair Mike Hathorn in a statement. There is a growing awareness that such information can be crucial in allowing citizens to evaluate the scale of the fiscal challenges facing governments, so that the impact on future generations can be better understood. This consultation paper asks for views on how such information might be reported.
The paper is available to download free of charge from the IFAC Web site at www.ifac.org/Guidance/EXD-Outstanding.php.
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