IPSAS 33

First Time Adoption

 Key Terms
• The date of adoption of IPSASs is the date that an entity adopts accrual basis IPSASs for the first time. It is the
start of the reporting period in which the first-time adopter adopts accrual basis IPSASs and for which it presents
its first transitional IPSAS financial statements or its first IPSAS financial statements
• An entity’s first IPSAS financial statements are the first annual financial statements in which the first-time
adopter can make an explicit and unreserved statement in those financial statements of compliance with accrual
basis IPSASs.
• The previous basis of accounting is the basis of accounting that a first-time adopter used immediately before
adopting accrual basis IPSASs
• An entity’s transitional IPSAS financial statements are the annual financial statements in which an entity
transitions to accrual basis IPSASs and adopts certain exemptions in this IPSAS that affect the fair presentation of
the financial statements and its ability to assert compliance with accrual basis IPSASs.
Recognition and Measurement
• A first-time adopter shall prepare and present an opening statement
of financial position at the date of adoption of IPSASs. This is the
starting point for its accounting in accordance with accrual basis
IPSASs.
• A first-time adopter’s estimates in accordance with IPSASs at the date
of adoption of IPSASs, shall be consistent with estimates made in
accordance with the previous basis of accounting (after adjustments
to reflect any difference in accounting policies), unless there is
objective evidence that those estimates were inconsistent with the
requirements in IPSASs.
Two Exemptions

• Exemptions that affect fair presentations

• Exemptions that do not affect fair presentation

Exemptions that affect fair presentation
• Where a first-time adopter has not recognized assets and/or liabilities under its previous basis of
accounting, it is not required to recognize and/or measure the following assets and/or liabilities for
reporting periods beginning on a date within three years following the date of adoption of IPSASs:
• (a) Inventories (see IPSAS 12, Inventories);
• (b) Investment property (see IPSAS 16, Investment Property);
• (c) Property, plant and equipment (see IPSAS 17, Property, Plant and Equipment);
• (d) Defined benefit plans and other long-term employee benefits (see IPSAS 39, Employee Benefits);
• (e) Biological assets and agricultural produce (see IPSAS 27, Agriculture);
• (f) Intangible assets (see IPSAS 31, Intangible Assets);
• (fa) Right-of-use assets and the related lease liabilities (see IPSAS 43, Leases);
• (g) Service concession assets and the related liabilities, either under the financial liability model or the grant
of a right to the operator model (see IPSAS 32, Service Concession Arrangements: Grantor);
• (h) Financial instruments (see IPSAS 41, Financial Instruments); and
•
Exemptions that affect fair presentation

To the extent that a first-time adopter applies the exemptions which allows a three year transitional relief period

to not recognize and/or measure financial assets, it is not required to recognize and/or measure any related

revenue in terms of IPSAS 9, Revenue from Exchange Transactions, or other receivables settled in cash or

another financial asset in terms of IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers).
Other Exemptions
• Borrowing costs
• Leases
• Provisions
• Related parties
• Consolidations etc
 Exemptions that do not affect fair
presentation
• A first-time adopter may elect to measure the assets and/or liabilities at their
fair value when reliable cost information about the assets and liabilities is not
available, and use that fair value as the deemed cost.
• The date at which deemed cost is determined may vary depending on
whether the first-time adopter takes advantage of the exemptions that
provides a three-year transitional relief period to not recognize and/or
measure certain assets and/or liabilities.
• When the first-time adopter takes advantage of the exemption, deemed cost
can be determined at any date during this period, or on the date that the
exemption expires (whichever is earlier.
• If a first-time adopter does not adopt the exemption, deemed cost shall be
determined at the beginning of the earliest period for which the first-time
adopter presents IPSAS financial statements.
ZFRM Requirements
 First Time Adoption of the IPSAS.
• The date of adoption of IPSAS is 1 January 2023 for all entities withing the scope of
this manual except for government ministries which will have 1 January 2024 as date
of IPSAS adoption.
• This date will be regarded as the date of adoption irrespective of the previous basis of
accounting that the entity used. From that date entities will present transitional
financial statements taking into account transitional provisions below.
• Regardless of the date of adoption, all reporting entities are required to produce their
First IPSAS Financial statements on or before financial period ending 31 December
2025. By this date entities are required to make an explicit and unreserved statement
of compliance with IPSAS.
• Entities will not be required to present comparative information in their first
transitional financial statements following adoption of IPSAS on the set adoption date.
First Time Adoption of the IPSAS
• IPSAS 33 provides three-year transitional relief period for the recognition and/or measurement of assets and
liabilities.
• These transitional reliefs will only apply to central government entities. Regardless of IPSAS providing three-
year transitional relief, central government entities are required to be fully compliant with IPSAS in their 2025
financial statements.
• All other reporting entities except for central government are required to apply exemptions that do not affect
fair presentation and compliance with IPSAS.
• The only exception to above is in the recognition and measurement of infrastructure assets. If entities had not
recognized infrastructure assets in the previous basis of accounting, they are permitted to continue so until
they have completed IPSAS implementation on other elements of the financial statements.
• Entities are only required to recognize and measure infrastructure assets on completion of implementing all
other requirement of accruals IPSAS. This relief does not invalidate the requirement to be fully compliant by
31 December 2025.
• IPSAS 33 allows use of deemed costs to measure assets and liabilities where reliable cost information about
the assets and liabilities is not available. The deemed cost would be the fair value on the date of adoption
First Time Adoption of the IPSAS

• Reporting Entities are required to recognise and measure the net assets value on the date on adoption

as the deemed cost of the investment for all entities that they control, jointly control or have significant

influence. An investment register should be kept that clearly identifies all such entities where there is

control, joint control or significant influence including how such assessment of control, joint control or

significant influence has been done