Accounting Standards for Complex Resources of International Organizations

Abstract

This article will describe the implementation of International Public Sector Accounting Standards (IPSAS) in UN System Organizations and consider technically controversial issues such as revenue recognition in more detail. Based on the IPSAS financial statements of 24 UN System Organizations, the article provides an overview about current funding schemes and key issues related to conditional contributions. Results show a heterogeneous funding mix for UN System Organizations while, overall, voluntary contributions remain the most important revenue source. The main accounting implication arises from conditional voluntary contributions with specified performance obligations, requiring an entity to defer revenue and recognize a liability. Although all analysed UN System Organizations report under the same accounting principles, there exist differences in the level of information concerning conditional contributions and outstanding performance obligations. The article concludes that IPSAS bears the capacity to increase overall financial accountability and to trigger management debates about issues such as resource dependency, topics being discussed by other contributions in this special issue. Overall it is argued that IPSAS shall not be seen as a mere technical exercise, but as a management tool to ensure a flexible funding scheme to successfully achieve an entity's long-term objectives. Policy Implications• See the implementation of IPSAS not as a mere technical exercise, but as a way to increase financial accountability and to provide better management information.• Use the newly generated information under IPSAS to trigger management debates about core revenue flows, namely resource dependency and flexibility.• Increase the level of transparency with respect to conditional voluntary contributions in order to properly inform and account for any outstanding performance obligations.

Resourcing International Organizations: Resource Diversification, Organizational Differentiation, and Administrative Governance

“…Assessed contributions that member states pay as IO membership fees and that are employed in pursuit of collectively agreed goals through traditional programming and budgeting are less and less central to the realization of policy ambitions beyond the nation state (OECD‐DAC, ). As a consequence, there has been greater contestation over the classification of resources (Bergmann and Fuchs, ).…”

Learning from the Commission case: The comparative study of management change in international public administrations

“…Alesani et al () study the adoption of International Public Sector Accounting Standards (IPSAS) by the World Food Programme, which became the first UN organization to successfully shift to full accrual accounting in 2009. Based on the IPSAS financial statements, Bergmann and Fuchs () provide a comparative overview of current funding schemes and key issues related to conditional member state contributions in 24 UN organizations.…”

“…Finances —especially the introduction of accrual accounting: Besides budgeting, accounting is a central part of an IGO's financial management. While IPSAS used to represent best practices for the domestic public sector only, they are now increasingly used in IGOs (see Bergmann and Fuchs , p. 28). To capture changes in accounting rules, a time‐sensitive checklist approach is used, for which the year of introduction of IPSAS is coded to map when the organizations under study moved from a cash basis to accrual accounting.…”

“…To capture changes in accounting rules, a time‐sensitive checklist approach is used, for which the year of introduction of IPSAS is coded to map when the organizations under study moved from a cash basis to accrual accounting. While the financial reports based on the old accounting system were criticized for not reflecting a true and fair view of an organization's financial position, the introduction of IPSAS requires a closer scrutiny of assets, liabilities, revenues and expenditures (Bergmann and Fuchs , pp. 26–28).…”

The Financial Crisis of UNESCO after 2011: Political Reactions and Organizational Consequences

“…Those voluntary contributions can be given either as untied (core) or earmarked (non‐core) contributions. Whereas in the past, regular budgets were supplemented by voluntary contributions, more recently, voluntary, earmarked contributions increased dramatically especially in the field of humanitarian related operational activities (for the broader trend and theoretical discussions, see in this issue: Bergmann and Fuchs ; Ege and Bauer ; Goetz and Patz ; Graham ; Michaelowa ; Reinsberg ). This led to a continuing imbalance between core and non‐core funding.…”