IPSAS For Project Management Quiz

1. Under IPSAS, personnel costs (e.g. leave, repatriation, education) will be charged to the project as they accrue, rather than as they are claimed by an employee.

True

False

Under IPSAS (International Public Sector Accounting Standards), personnel costs are charged to a project as they accrue, meaning they are recognized and recorded as they are earned by the employee, rather than when they are claimed. This ensures that the expenses are recognized in the correct accounting period and provides a more accurate representation of the project's financial position. Therefore, the statement "Under IPSAS, personnel costs will be charged to the project as they accrue, rather than as they are claimed by an employee" is true.

Explanation

Under IPSAS (International Public Sector Accounting Standards), personnel costs are charged to a project as they accrue, meaning they are recognized and recorded as they are earned by the employee, rather than when they are claimed. This ensures that the expenses are recognized in the correct accounting period and provides a more accurate representation of the project's financial position. Therefore, the statement "Under IPSAS, personnel costs will be charged to the project as they accrue, rather than as they are claimed by an employee" is true.

2. Under IPSAS, which of the following is NOT correct?

IPSAS is an accounting standard that places ground rules on how organisations record economic transactions in their financial statements

IPSAS is replacing a 'modified cash' type of accounting

IPSAS will have a significant impact on how information is collected and reported in an organisation.

IPSAS will only have an affect upon the work of Finance and HQ personnel

IPSAS will have an impact on how information is collected and reported in an organization, not just on the work of Finance and HQ personnel. It is a comprehensive accounting standard that applies to all economic transactions recorded in financial statements. Therefore, the statement that IPSAS will only affect the work of Finance and HQ personnel is incorrect.

Explanation

IPSAS will have an impact on how information is collected and reported in an organization, not just on the work of Finance and HQ personnel. It is a comprehensive accounting standard that applies to all economic transactions recorded in financial statements. Therefore, the statement that IPSAS will only affect the work of Finance and HQ personnel is incorrect.

3. IPSAS uses 'full accrual' accounting to replace the 'modified cash' accounting of UNSAS. For full accrual accounting, which of the following statements are TRUE? A) Revenue (UNOPS fee) is recognized when it is earned, rather than received. B) Expenditure is recognized when it is incurred, not when it is paid. C) The value of PP&E is shown on the statement of financial position (balance sheet) D) Depreciation of assets are noted on the statement of financial performance.

A and B only

C and D only

None of the above - they all relate to 'modified cash' accounting instead.

All of the above

IPSAS uses full accrual accounting, which means that revenue is recognized when it is earned, rather than when it is received (statement A is true). Similarly, expenditure is recognized when it is incurred, not when it is paid (statement B is true). In full accrual accounting, the value of Property, Plant, and Equipment (PP&E) is shown on the statement of financial position, also known as the balance sheet (statement C is true). Additionally, depreciation of assets is noted on the statement of financial performance (statement D is true). Therefore, all of the above statements are true for full accrual accounting.

Explanation

IPSAS uses full accrual accounting, which means that revenue is recognized when it is earned, rather than when it is received (statement A is true). Similarly, expenditure is recognized when it is incurred, not when it is paid (statement B is true). In full accrual accounting, the value of Property, Plant, and Equipment (PP&E) is shown on the statement of financial position, also known as the balance sheet (statement C is true). Additionally, depreciation of assets is noted on the statement of financial performance (statement D is true). Therefore, all of the above statements are true for full accrual accounting.

4. In respect to information reported on financial statements, IPSAS requires which of the following:

Reporting on an annual basis

Dual recording - reconciliation between the budget and the financial accounts

Later reporting of expenses in the purchase cycle

All personnel to assist with the collection of information and recording of transactions.

All of the above

IPSAS (International Public Sector Accounting Standards) requires all of the above mentioned requirements in respect to information reported on financial statements. This means that IPSAS mandates reporting on an annual basis, dual recording to reconcile between the budget and the financial accounts, later reporting of expenses in the purchase cycle, and the involvement of all personnel in collecting information and recording transactions. These requirements ensure transparency, accuracy, and accountability in financial reporting for public sector entities.

Explanation

IPSAS (International Public Sector Accounting Standards) requires all of the above mentioned requirements in respect to information reported on financial statements. This means that IPSAS mandates reporting on an annual basis, dual recording to reconcile between the budget and the financial accounts, later reporting of expenses in the purchase cycle, and the involvement of all personnel in collecting information and recording transactions. These requirements ensure transparency, accuracy, and accountability in financial reporting for public sector entities.

5. For budgeting under IPSAS, which of the following is NOT a consideration?

Multi-year budget amounts must be split into annual amounts.

Reconciliation of the budget basis and the financial basis.

Changes to the budget basis and budget formulation.

The given answer, "Changes to the budget basis and budget formulation," is not a consideration for budgeting under IPSAS. IPSAS requires multi-year budget amounts to be split into annual amounts, variance analysis and an explanation of changes to be issued prior to or at the same time as the financial statements, and reconciliation of the budget basis and the financial basis. However, changes to the budget basis and budget formulation are not specifically mentioned as considerations under IPSAS.

Explanation

The given answer, "Changes to the budget basis and budget formulation," is not a consideration for budgeting under IPSAS. IPSAS requires multi-year budget amounts to be split into annual amounts, variance analysis and an explanation of changes to be issued prior to or at the same time as the financial statements, and reconciliation of the budget basis and the financial basis. However, changes to the budget basis and budget formulation are not specifically mentioned as considerations under IPSAS.

6. A key difference between UNSAS and IPSAS is the shift of importance from the purchase order (PO) to the receipt. This shift will result in a delay for UNOPS on receiving its revenue.

True

False

The statement is true because UNSAS and IPSAS have different approaches when it comes to the importance of purchase orders (PO) and receipts. UNSAS places more importance on the PO, while IPSAS shifts the focus to the receipt. This means that under IPSAS, revenue recognition is delayed until the receipt is received, which can result in a delay for UNOPS in receiving its revenue.

Explanation

The statement is true because UNSAS and IPSAS have different approaches when it comes to the importance of purchase orders (PO) and receipts. UNSAS places more importance on the PO, while IPSAS shifts the focus to the receipt. This means that under IPSAS, revenue recognition is delayed until the receipt is received, which can result in a delay for UNOPS in receiving its revenue.

7. Which of the following is not correct under IPSAS?

Inventory (e.g. fuel, vaccines, food) will not need to be shown on the statement of financial position.

Project managers will need to revise their cash plans more often than under UNSAS.

All assets and liabilities are recognised.

Expenses and revenue are recognised on the basis of receipts.

Under IPSAS, inventory (e.g. fuel, vaccines, food) needs to be shown on the statement of financial position. This is because inventory is considered as an asset and should be included in the financial statements to provide a comprehensive view of an entity's financial position.

Explanation

Under IPSAS, inventory (e.g. fuel, vaccines, food) needs to be shown on the statement of financial position. This is because inventory is considered as an asset and should be included in the financial statements to provide a comprehensive view of an entity's financial position.

8. Project assets (e.g. PP&E, leases and intellectual property) are UNOPS assets. Therefore they will be subject to capitalization and depreciation.

True

False

The given statement is false because project assets are not UNOPS assets. While UNOPS may be involved in managing and overseeing projects, the assets themselves belong to the project and not UNOPS. Therefore, they will not be subject to capitalization and depreciation by UNOPS.

Explanation

The given statement is false because project assets are not UNOPS assets. While UNOPS may be involved in managing and overseeing projects, the assets themselves belong to the project and not UNOPS. Therefore, they will not be subject to capitalization and depreciation by UNOPS.