This paper aims to examine the accounting and financial reporting treatment of intangible assets under International Public Sector Accounting Standards (IPSAS) in light of the digital transformation that takes place in the public sector.
This paper presents an empirical analysis of financial reporting practices for intangible assets, focusing on selected public sector entities.
The paper identifies challenges in the accounting for agile software development, for cloud computing as well as artificial intelligence (AI) systems and assesses whether the principles in IPSAS 31, Intangible Assets are sufficient to address the identified challenges. The paper concludes with a discussion of the findings and provides some recommendations not only for the IPSAS Board (IPSASB) but also for other accounting standard setters.
Due to the limited number of entities subject to the empirical part of the paper, the study’s findings are subject to limitations regarding generalizability. This paper addresses only a subset of the current accounting issues related to the digital transformation of public sector entities.
The study enhances the understanding of financial reporting for intangible assets by public sector entities in the digital age and offers insights that are of interest to accounting standard setters both in the public and the private sector.
The digital transformation of public sector entities presents significant challenges for the accounting profession. A key contribution of this paper is to highlight some of the reporting and accounting issues currently under discussion, offering insights that may guide accounting standard setters in identifying areas where future guidance is needed.
