ipsas 29—financial instruments: recognition and measurement - IFAC

FINANCIAL INSTRUMENTS: RECOGNITION AND MEASUREMENT
An additional paragraph is included after paragraph 124A:
124B IPSAS 29 amended paragraphs 4, 10, 87, and 106, and inserted
paragraphs 105A and 105B. An entity shall apply the amendments for
annual financial statements covering periods beginning on or after
January 1, 2013. If an entity applies IPSAS 29 for a period beginning
before January 1, 2013, the amendments shall also be applied for that
earlier period.
In the Implementation Guidance an additional example is inserted after
paragraph IG53 as follows:
Implementation Guidance
Concessionary Loans (paragraphs 105A to 105B)
IG54. An entity receives CU6 million funding from a multi-lateral development
agency to build 10 schools over the next 5 years. The funding is provided
on the following conditions:
• CU1 million of the funding need not be repaid, provided that the
schools are built.
• CU5 million of the funding is to be repaid as follows:
Year 1: no capital to be repaid
Year 2: 10% of the capital to be repaid
Year 3: 20% of the capital to be repaid
Year 4: 30% of the capital to be repaid
Year 5: 40% of the capital to be repaid
• Interest is charged at 5% per annum over the period of the loan
(assume interest is paid annually in arrears). The market rate of
interest for a similar loan is 10%.
• To the extent that schools have not been built, the funding provided
should be returned to the donor (assume that the donor has effective
monitoring systems in place and has a past history of requiring any
unspent funds to be returned).
• The entity built the following schools over the period of the loan:
Year 1: 1 school completed
Year 2: 3 schools completed
Year 3: 5 schools completed
Year 4: 10 schools completed
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IPSAS 29 APPENDIX D
PUBLIC SECTOR