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Public Sector Accounting Standards

Unit: Financial Reporting

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December 2025

 1 Questions
Question 5a
​​In the context of International and Public Sector Accounting Standards (IPSAS) 4, “The effect of Changes in foreign exchange rate”, explain how foreign currency monetary item and non-monetary items are translated and the treatment of subsequent exchange differences on both monetary and non-monetary items.


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August 2025

 2 Questions
Question 1a
​​International Public Sector Accounting Standard (IPSAS) 31 – “Intangible assets”, requires intangible assets to be recognised if identifiable and controlled by the public entity. 

 With reference to the above statement, explain TWO components of identifiability as per IPSAS 31.


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Question 4c
​ ​ ​​The following information was extracted from the books of the Ministry of TVET for the fiscal year ended 30 June 2025:

Sh.“million”
Transfer from exchequer 
3,750
Fees and licenses 
750
Liabilities for long term benefits 
300
Long term borrowings 
1,500
Finance cost 
150
Supplies and consumable used
600
Wages and salaries
1,500
Other expenses 
1,800
Transfer from other ministries 
75
Transfer to other ministries 
750
Computer equipment and software 
400
Motor vehicles 
350
Land and buildings 
5,250
Revenue from exchange transactions 
150
Other revenues 
900
Payables
750
Reserves
2,700
Accumulated funds
1,125
Cash and cash equivalent 
750
Receivables
300
Inventory of consumables 
150

Required: 
 (i) Statement of financial performance for the year ended 30 June 2025. 

 (ii) Statement of financial position as at 30 June 2025. 


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April 2025

 2 Questions
Question 4a
​​With reference to International Public Sector Accounting Standard (IPSAS) 4 “The effects of changes in foreign Exchange Rates”, explain the term “functional currency”.


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Question 1c
​​In view of International Public Sector Accounting Standard (IPSAS) 19 “Provisions, Contingent Liabilities and Contingent Assets” describe THREE conditions that must be met before a provision can be recognised.


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December 2024

 2 Questions
Question 1c
​ ​​The following information was obtained from the Ministry of Finance of a developing country with a view of presentation of budget information for the fiscal year ended 30 June 2024:

Budgeted amounts
Actual amounts 
Sh.“billion”
Sh.“billion”
Receipts: 
Taxes
1,175
968
Local borrowings 
558
495
Overseas borrowings  
630
716
Donations from foreign agencies 
378
486
Trading activities 
754
1,066
Sale of fixed assets
792
1,012
Other receipts
261
220
Payments:
Internal security
806
738
Education
797
810
Agriculture
263
291
Health
423
486
Affordable housing 
450
410
Social welfare
218
216
Transport
535
540
Defence
389
512
Other payments 
475
627

Additional information: 
During the year ended 30 June 2024, the National Assembly approved a supplementary budget for the following votes:

Sh.“billion”
Overseas borrowings
54
Addition
Sale of fixed assets 
140  
Addition
Education
63
Addition
Health
37
Addition
Affordable housing 
(32)
Reduction

Required: 
Prepare a statement of comparison of budget and actual amounts for the fiscal year ended 30 June 2024 as per the requirements of International Public Sector Accounting Standard (IPSAS) 24 “Presentation of Budget Information in Financial Statements”. 
 


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Question 2a
​​International Public Sector Accounting Standard (IPSAS) 4 “The effect of changes in foreign exchange rates” provides clear guidance on how entities should translate monetary items and non-monetary items as well as the treatment of the resultant exchange differences. 

 With reference to the above statement, explain how monetary items and non-monetary items should be translated and the treatment of their respective exchange differences.


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August 2024

 1 Questions
Question 1c
​​International Public Sector Accounting Standard (IPSAS) 45 “Property, Plant and Equipment” provides public sector entities with a choice between the historical cost model and the current value model in the measurement of items of property, plant and equipment. 

 Required:
With reference to IPSAS 45 “Property, Plant and Equipment”, explain the accounting treatment of revaluation increases and revaluation decreases relating to property, plant and equipment in the financial statements of an entity that adopts the current value model.


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April 2024

 2 Questions
Question 4a
​​In the context of International Public Sector Accounting Standard (IPSAS) 23 – Revenue from non-exchange transactions (taxes and transfers): 

 (i) Explain when an entity is required to recognise an asset in respect of taxes.

 (ii) Citing TWO suitable examples, explain the term “transfers”.


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Question 5a
​ ​​The following information was extracted from the financial records of the Ministry of Public Works for the fiscal year ended 30 June 2023:

Sh.“million”
Accumulated fund as at 1 July 2022 
17,850
Transfers in from exchequer
6,320
Transfers in from other ministries 
1,870
Transfers out to other ministries 
860
Fines and penalties 
2,240
Wages, salaries and other emoluments 
1,960
Finance expenses 
680
Supplies consumed 
1,790
Revenue from exchange transactions 
6,730
Premises
26,390
Motor vehicles  
20,350
Computers and accessories 
1,430
Furniture and equipment 
3,320
Receivables
13,680
Cash and cash equivalents 
1,290
Payables
7,140
Long-term borrowings 
29,600

Required: 
 Prepare the following financial statements for the Ministry of Public Works for the fiscal year ended 30 June 2023 in accordance with International Public Sector Accounting Standard (IPSAS) 1 “Presentation of Financial Statements”: 

(i) Statement of financial performance for the year ended 30 June 2023. 

(ii) Statement of financial position as at 30 June 2023. 


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December 2023

 1 Questions
Question 1d
​​(i) Explain the term “heritage assets” as applied under International Public Sector Accounting Standard (IPSAS) 17 – Property, Plant and Equipment, citing suitable examples. 

(ii) Describe THREE characteristics of heritage assets.


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August 2023

 1 Questions
Question 1a
​​International Public Sector Accounting Standard (IPSAS) 24 – Presentation of Budget Information in Financial Statements, requires a comparison of budget amounts and the actual amounts arising from execution of the budget to be included in the financial statements of entities that are required to, or elect to, make publicly available their approved budget(s), and for which they are, therefore, held publicly accountable. 

 With reference to International Public Sector Accounting Standard (IPSAS) 24: 

 (i) Differentiate between “original budget” and “final budget”.

 (ii) Explain the requirements of the standard where there are changes between the original and final budget. 

 (iii) Summarise TWO key disclosure requirements of the standard.


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April 2023

 1 Questions
Question 1b
​​International Public Sector Accounting Standard (IPSAS) 1 – Presentation of Financial Statements, provides that the presentation and classification of items in the financial statements shall be retained from one period to the next. The standard however, provides exceptions to this principle. 

 Discuss TWO exceptions to the above principle.


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December 2022

 1 Questions
Question 1c
​​With reference to International Public Sector Accounting Standard (IPSAS) 19 – Provisions, Contingent Liabilities and Contingent Assets: 

 (i) Distinguish between “provisions” and “contingent liabilities”. 

 (ii) Summarise the circumstances for recognition of a provision. 

 (iii) Indicate the accounting treatment for “contingent liabilities” and “contingent assets”


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August 2022

 1 Questions
Question 1b
​​International Public Sector Accounting Standard (IPSAS) 1 - Presentation of Financial Statements provides that “financial statements shall present fairly the financial position, financial performance and cash flows of an entity”. 
 
In the context of the above statement: 
 
(i) Describe what “fair presentation of financial statements” entails. 
 
(ii) Explain the disclosure requirements where an entity departs from a requirement of the IPSAS. 


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April 2022

 1 Questions
Question 1a
​​International Public Sector Accounting Standards (IPSAS) 23 - Revenue from Non-Exchange Transactions (Taxes and Transfers) prescribes requirements for the financial reporting of revenue arising from non-exchange transactions other than non-exchange transactions that give rise to an entity combination.

Required:
In the context of the IPSAS 23, describe the following:

(i) The measurement and recognition of revenue from non-exchange transactions. 

(ii) The measurement of assets on initial recognition. 

(iii) Conditions for recognition of a present obligation as a liability.


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December 2021

 1 Questions
Question 1b
​ ​​In the context of International Public Sector Accounting Standard (IPSAS) 24 - Presentation of Budget Information in Financial Statements:

(i) Explain the salient feature that differentiates an "original budget" from a "final budget". 

(ii) Summarise the key provisions of the IPSAS with regard to presentation of a comparison of budget and actual amounts.


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September 2021

 1 Questions
Question 5b
​​With reference to International Public Sector Accounting Standard (IPSAS) I - Presentation of Financial Statements, explain the criteria for classifying an item as either:

(i) Current asset.

(ii) Current liability.


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May 2021

 1 Questions
Question 1
​​International Public Sector Accounting Standards (IPSAS) prescribe the accounting treatment of various items of revenue. expenditure, assets and liabilities in the books of public sector entities. 

Required: 
With reference to the above statement: 

(a) Describe three constraints that affect the relevance and reliability of financial information presented by public entities.

(b) Summarise the key provisions of IPSAS 3 - Accounting Policies, Changes in Accounting Estimates and Errors with regard to changes in accounting policies. 

(c) Discuss four challenges facing the adoption of IPSAS in your country.


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November 2020

 1 Questions
Question 3a
​​With regard to International Public Sector Accounting Standard (IPSAS) 29 "Financial Instruments. Recognition and Measurement", describe the subsequent measurement of financial assets held by a public sector entity, indicating how this measurement differs from the requirements of International Financial Reporting Standard (IFRS) 9 "Financial Instruments: Recognition and measurement"


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November 2019

 1 Questions
Question 4a
​​With reference to International Public Sector Accounting Standard (IPSAS) 5: "Borrowing Costs", explain the accounting treatment of borrowing costs in the financial statements of a public sector entity and indicate how this treatment differs from the requirements of International Accounting Standard (IAS) 23: "Borrowing Costs". 


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November 2017

 2 Questions
Question 1a
​​In the context of International Public Sector Accounting Standard (IPSAS) 3 - Accounting Policies, Changes in Accounting Estimates and Errors: 

(i) Explain the meaning of "prior period errors", citing two examples of such errors.
(ii) Summarise the accounting treatment of material prior period errors.


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Question 1b
​​IPSAS 8 -Financial Reporting of Interests in Joint Ventures identifies three forms of joint ventures: 

Required: 
(i) Highlight the three forms of joint ventures referred to above. 
(ii) Describe the accounting treatment of each of the three forms of joint ventures.


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May 2017

 1 Questions
Question 1a
​With reference to International Public Sector Accounting Standard (IPSAS) 14-Events After the Balance Sheet Date:

(i) Describe the two categories of events after the balance sheet date.
(ii) Explain two disclosure requirements for each category of events identified in (a) (i) above.


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November 2016

 1 Questions
Question 1a
​​ (i) "The determination of whether the going concern assumption is appropriate is primarily relevant for individual entities rather than for a government as a whole". [Extract from International Public Sector Accounting Standard (IPSAS) 1 - Presentation of Financial Statements]. 

Required: 
In the context of the above statement, outline four factors to be considered in determining whether a public sector entity is a going concern. 

(ii) With reference to IPSAS 11 - Construction Contracts, summarise four disclosure requirements for public sector entities with regard to construction contracts.


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May 2016

 1 Questions
Question 1a
​​ For public sector entities with limited internally generated funds, external borrowings may constitute a viable alternative source of finance. Such borrowings are usually accessed at a cost. 

Required:
 In the context of International Public Sector Accounting Standard (IPSAS) 5 - Borrowing Costs: 
(i).   Identify three items that could be considered as borrowing costs. 
(ii).  Describe the two alternative accounting treatments for borrowing costs.


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November 2015

 2 Questions
Question 4a
​​In the context of International Public Sector Accounting Standard (IPSAS) 19 - Provisions, Contingent Liabilities and Contingent Assets: 

(i) Distinguish between an "executory contract" and an "onerous contract". 
(ii) Summarise four disclosure requirements in relation to provisions.


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Question 4b
​​The following data has been collected from the Ministry of Commerce and Industrialisation for the fiscal year ended 30 June 2015:
  
Sh. "million"
Reserves
22,500
Long-term borrowings
7,500
Accumulated surplus (1 July 2014)
9,375
Cash and cash equivalents 
6,250
Receivable from exchange transactions
2,500
Inventory
1,250
Employee benefits obligation
5,000
Transfer from exchequer
31,250
Fines. penalties and levies
6,250
Revenue from exchange transactions
1,250
Property taxes revenue
7,500
Transfer from other ministries
625
Property, plant and equipment
43,750
Trade and other payables
6,250
Investment property
6,250
Employee costs
12,500
Transfers to other ministries
6,250
Impairment losses
1,250
Supplies and consumables used
5,000
Other expenses
15,000
Payments received in advance
2,500

Required: 
Statement of financial position for the Ministry of Commerce and Industrialisation as at 30 June 2015 in accordance with IPSAS 1 - Presentation of Financial Statements.


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Pilot September 2015

 1 Questions
Question 5b
​ ​ ​​The following information was extracted from the books of the Ministry of Tourism for the fiscal year ended 30 June 2015:
Sh. "000"
Accumulated fund
562,500
Cash and cash equivalents
375,000
Receivables
150,000
Inventory of consumables
75,000
Transfers from exchequer
1,875,000
Fees fines and licences 
375,000
Liability for long term benefits
150,000
Long term borrowing
750,000
Finance costs
75,000
Supplies and consumables used
300,000
Wages and salaries
750,000
Other expenses
900,000
Transfers from other ministries
37,500
Transfers to other ministries
375.000
Computer equipment
200,000
Vehicles
175,000
Land and buildings
2,625,000
Revenue from exchange transactions
75,000
Other revenue
450,000
Payables
375,000
Reserves
1,350,000

Required:
(i) Statement of financial performance for the year ended 30 June 2015. 
(ii) Statement of financial position as at 30 June 2015.


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