Question 1:

"There is currently a variety of financial reporting practices for heritage items, which reduces the comparability of public sector entities' general purpose financial reports (GPFRs)".

IPSASB Chair Ian Carruthers.

The IPSASB has recently published a Consultation Paper (CP),Financial Reporting for Heritage in the Public Sectorfor comment. This is the first step towards developing an accounting standard for Heritage Assets. The matters discussed in the CP are relevant for Tier 1 and Tier 2 New Zealand Public Benefit Entities (PBEs).

The CP defines heritage items as"items that are intended to be held indefinitely and preserved for the benefit of present and future generations because of their rarity and/or significance".

The CP proposes that:

1.heritage items' special characteristics do not prevent them from being assets for the purposes of financial reporting;

2.heritage items should be recognised in the statement of financial position if they meet the recognition criteria in the IPSASB's Conceptual Framework; and

3.in many cases, it will be possible to assign a monetary value to heritage assets.

Required:

(b)Discuss four issues relating to accounting for heritage assets that the IPSASB would have considered when constructing the CP.

(c)Discuss whether you agree or disagree that the IPSASB's standalone standard should be adopted for accounting for heritage assets.