The Nigerian Accounting Standards Board (NASB) has said it would soon enforce compliance with the International Public Sector Accounting Standards (IPSAS) in government owned institutions in the country.
A statement Wednesday said the Chief Executive, NASB, Mr. Jim Obazee, dropped this hint at a workshop on the International Financial Reporting Standards (IFRS), organised recently by Stransact Partners in the United Kingdom.
Obazee explained that the IPSAS standards guarantee that financial reporting of public sector conveys true and fair view of the financial position of the institutions.
According to him, the IPSAS was issued by the international board for use by public sector organisations in the preparation of their financial statements globally.
He added: "These standards are based on IFRS issued by the International Accounting Standards Board (IASB). The movement to IPSAS would be in phases. Currently, Nigeria is in the process of adopting the cash basis IPSAS, it will then move to adopt accruals basis IPSAS. NASB recently released a new standard on provisions, Contingent liabilities and Contingent Assets. This new standard named SAS 31 complies substantially with the provisions of International Accounting Standard (IAS) 37 on provisions and contingent liabilities and assets.
"The standard prohibits the use of general provisions under which companies could in the guise of prudence set profits aside as provisions relating to a perceivable future cost. Both SAS 31 and IAS 37 require that among other things, a provision would only be made to the extent that it relates to a present legal or constructive obligation arising from a past event."
The NASB boss stressed that following the adoption of IFRS, his organisation would continue to strive towards enforcing the standards.
Obazee further stated that the NASB would issue Statements of Recommended Practices (SORP) and may make additional disclosure requirements in addition to the particular IFRS to take care of issues peculiar to Nigeria.
"Adoption of IFRS as against convergence means that entities required to report IFRS would implement the IFRS as issued by the IASB but may be required by the NASB to make certain additional disclosures beyond that recommended by the IASB," he stated.