Paper PFM 15

Public Sector Accounting and Reporting - I

The aim of this subject is to provide the learner with the knowledge and skills required to undertake the financial accounting process and prepare financial reports for public sector entities. In addition, the learner will be equipped with the skills necessary to account for assets and liabilities, record specialised transactions and prepare financial reports under the cash basis of accounting.

On completion, a candidate should be able to

Explain the objective of public sector accounting, the legal framework for public sector reporting in Kenya and the roles of different professional bodies in public sector accounting and reporting.
Discuss the importance of the conceptual framework of general-purpose financial reporting in the public sector.
Account for assets and liabilities.
Record and account for specialized transactions.
Prepare financial reports.
Prepare consolidated financial statements for public sector entities.
Apply the cash basis of accounting in the public sector. Certified Public Finance Manager (CPFM) - July 2024

Content

1
Background to public sector accounting and reporting
Explain the objective of public sector accounting, the legal framework for public sector reporting in Kenya and the roles of different professional bodies in public sector accounting and reporting.
1. 1.1
  The objective
  1. f public sector accounting and reporting
2. 1.2
  The legal framework of public sector accounting and reporting in Kenya
3. 1.3
  Global and local perspectives in cash vs accrual accounting for public sector entities
4. 1.4
  The role of professional bodies in public sector accounting and reporting such as the International Public Sector Accounting Standards Board (IPSASB), the Public Sector Accounting Standards Board (PSASB), Institute
  1. f Certified Public Accountants of Kenya (ICPAK).
5. 1.5
  International Public Sector Accounting Standards (IPSASs)
2
The conceptual framework of general-purpose financial reporting in the public sector
Discuss the impor- tance of the conceptual framework of general- purpose financial reporting in the public sector.
1. 2.1
  Role and authority of the conceptual framework
2. 2.2
  Objectives and users of general- purpose financial information
3. 2.3
  Qualitative characteristics of useful financial information
4. 2.4
  The reporting entity
3
Accounting for assets and liabilities
Account for assets and liabilities.
1. 3.1
  Property, plant and equipment
2. 3.2
  Investment property
3. 3.3
  Intangible assets
4. 3.4
  Non-current assets held for sale
5. 3.4
  Financial instruments: definitions, recognition, classification and measurement
6. 3.5
  Inventories
7. 3.6
  Provisions, contingent liabilities and contingent assets
4
Accounting for specialised transactions
Record and account for specialized transactions.
1. 4.1
  The effects of changes in foreign exchange rates
2. 4.2
  Borrowing costs
3. 4.3
  Revenue
4. 4.4
  Transfer expenses
5
Preparation of financial reports
Prepare financial reports.
1. 5.1
  Presentation of financial instruments
2. 5.2
  Statements of cash flow
3. 5.3
  Accounting policies, changes in accounting estimates and errors
4. 5.4
  Events after the reporting date
6
Preparation of financial statements of entities with interests in other entities
Prepare consolidated financial statements for public sector entities.
1. 6.1
  Public sector combinations
2. 6.2
  Consolidated financial statements
3. 6.3
  Investment in associates and joint ventures
4. 6.4
  Separate financial statements
7
Cash basis accounting and other recommended practice guidelines
Apply the cash basis of accounting in the public sector.
1. 7.1
  Financial reporting under the cash basis of accounting
2. 7.2
  Financial statements discussion and analysis
3. 7.3
  PSASB recommended reporting standards and guidelines for public sector entities in Kenya (National and county governments, semi-autonomous government agencies (SAGAs) and state corporations (commercial)