The Impact of Different Determination of Intangible Fixed Assets in Accordance with CAS and IPSAS on Financial Statements

Martin Dvořák,Lukáš Poutník

doi:10.18267/j.efaj.190

Abstract

The paper deals with the determination of intangible assets of Czech public sector. On 15 January 2013, the International Public Sector Accounting Standards Board issued new standard IPSAS 31 - Intangible assets. This standard represents a very sophisticated construction of accounting axioms moving public sector much closer to the private sector. The aim of this paper is to identify and make subsequent comparison of methodological elements in the context of intangible assets according to CAS and IPSAS 31. Moreover the paper tries to show the share of intangible fixed assets to the total assets throughout every type of organization of public sector like regions, municipalities, government departments etc. to assess subsequently the extent of possible impacts on financial situation in case of transition of financial reporting to IPSAS.

Highlights

The convergence process of public sector financial reporting influences many countries including the Czech Republic
The high level of professionalism and transparency should be guaranteed within the convergence of particular national accounting standards in public sector. Both of these fundamental characteristics are met by International Public Sector Accounting Standards. These standards as a whole are based on International Financial Reporting Standards (IFRS) that serve as a useful information basis in many countries during the current change of view on public sector accounting
The biggest differences between the Czech accounting standards (CAS) and the general approach of IPSAS is caused by non-existence of general conditions for the recognition of intangible assets, which primarily serve to distinguish the acquisition of intangible assets from services representing one-time expenses incurred in the reporting period

Summary

Introduction

The convergence process of public sector financial reporting influences many countries including the Czech Republic. The high level of professionalism and transparency should be guaranteed within the convergence of particular national accounting standards in public sector Both of these fundamental characteristics are met by International Public Sector Accounting Standards (hereinafter referred to as “standards” or “IPSAS”). These standards as a whole are based on International Financial Reporting Standards (IFRS) that serve as a useful information basis in many countries during the current change of view on public sector accounting. In this respect there is a question to what extent it is necessary to change the way of definition of assets, liabilities and equity. At present the identification and measurement of intangible fixed assets is one of the most

Objectives

Results

Conclusion