International Public Sector Accounting Standards to meet the needs of Uzbekistan
A roundtable dedicated to discussing the National Public Sector Accounting Standards (NPSAS), including ‘Intangible Assets’, ‘Borrowing Costs Accounting’ and ‘Revenue’, took place at Tashkent’s ‘Poytakht’ business centre on the 7th of December, 2013. The roundtable was organised by the ‘Budget System Reform in Uzbekistan’ project, a joint initiative between UNDP Uzbekistan and the Ministry of Finance of the Republic of Uzbekistan.
Reforming Uzbekistan’s accounting system and its National Public Sector Accounting Standards (NPSAS), based on the International Public Sector Accounting Standards (IPSAS), is considered to be one of the main directions for complex reforms of the national budget system.
The roundtable event, which aimed to discuss the reform process and develop draft versions of NPSAS, was attended by specialists and independent experts in the field. During the day’s discussions, recommendations and comments regarding the draft versions of NPSAS ‘Intangible assets’, ‘Borrowing Costs Accounting’ and ‘Revenue’ were brought forward. These will be taken into consideration during the approval and adoption of NPSAS.
The development of 12 NPSAS was envisaged during the roundtable’s presentations, within the framework of the Concept of the Development of the Public Accounting and Reporting System of the Republic of Uzbekistan. Three NPSAS, specifically ‘Leasing’, ‘Inventories’ and ‘Fixed Assets’, had been previously discussed during the meeting which held on the May of 2013.
It was recognised during the roundtable that because the current standards are being developed based on IPSAS, their successful implementation requires comprehensive training and capacity-building programmes. Such programmes may include training and retraining accountants and finance specialists in the budgeting field, readdressing the content of middle and higher educational school academic programmes, and updating and developing academic and methodological means for various target groups.
The need to carrying out reforms to Uzbekistan’s accounting system and NPSAS, as discussed during the roundtable, is clear considering that accounting and reporting systems are those that accumulate information about the financial results of the public sector’s governance performance. This information is crucial for making quality and timely decisions regarding public sector governance.
The ‘Intangible Assets’, ‘Borrowing Costs Accounting’ and ‘Revenue’ NPSAS discussed during the roundtable are stipulated within the Concept of the ‘Development of the Public Accounting and Reporting System of the Republic of Uzbekistan, During the Period from 2013 to 2014’. This concept was developed with the support of the ‘Budget System Reform’ project, and includes recommendations to adopt IPSAS in Uzbekistan through the adaptation of NPSAS.
The globalisation of world economies and financial markets has led to the recognition of IPSAS as a single set of international accounting standards to offer comparable and high-quality financial reporting in the public sector. The adaptation of IPSAS in Uzbekistan’s context can result in several benefits. These can include the availability of higher-quality financial information, more opportunities to assess the results of public sector activities, a possible lesser sensitivity to global market changes, an increased level of budget integration, accounting and statistics reporting, and increased transparency.
These benefits will enhance the quality of strategic planning, the administration of public finances and the elaboration of economic policy, while assuring the comparability of financial reports with the reports of other countries. The importance of the elaboration and implementation of NPSAS based on IPSAS has been approved by national programmes, as well as through international assessments of the development processes of public finances in Uzbekistan. In particular, the ‘Strategy for Reforming Public Finances for 2007-2018’ identifies the development and implementation of NPSAS as one of the key tasks for reforming the national accounting system.
The Tashkent roundtable was attended by 30 specialists from various ministries in Uzbekistan, including the Ministry of Finance, the Treasury, the Ministry of Public Education, the Ministry of Healthcare, the Pharmaceutical Medical Institute, the Tashkent Institute of Finance, the Republican Ambulance Centre, the Municipal Department of Interior Affairs of Tashkent City, the Central Department for the Execution of Penalties at the Ministry of Internal Affairs, and the National Association of Accountants and Auditors of Uzbekistan. Also in attendance was the regional advisor on fiscal policy of the IMF, as an international expert.