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PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities

Prepare the Statement of Financial Performance for Hamile Teaching Hospital for 2023 per IPSAS and related regulations.

Question

The Trial Balance below relates to Hamile Teaching Hospital, a public hospital.

Trial Balance for the year ended 31 December 2023
	Debit	Credit
	GHc’000	GHc’000
Government subvention		100,750
Out-patient services fees		35,000
In-patient services fees		40,000
Development Partner grants (ii)		16,000
Established position salaries	62,000
Casual Labour	5,600
Contract appointment (local and foreign)	1,400
Limited engagements	200
Rent (iii)	500	150
Insurance	340
Consultancy services	120
Conferences, workshops and training	4,500
Purchase of drugs	60,000
Purchase of medical consumables	80,000
Office expenses	20,000
Repairs and maintenance	6,000
Interest on loan	10,000
Pharmacy sales		180,000
Diagnostic		85,000
Mortuary Services		9,400
Cafeteria and Canteen		4,650
Extension services		14,500
Furniture and office equipment (iv)	200,000	40,000
Medical equipment & accessories (iv & v)	420,000	120,000
Motor vehicles (iv)	120,000	20,000
Land and buildings (iv)	300,000	70,000
Bank and Cash	30,000
Receivable from National Health Insurance Scheme (vi)	65,000
Receivable from patients	15,000
Payables		26,000
Loan from foreign Institution (2028) (vii)		350,000
Inventory of drugs	22,000
Inventory of medical consumables	12,000
Accumulated Fund		336,210
Other expenses	13,000
	1,447,660	1,447,660

Additional Information:
i) The hospital prepares its financial statements in accordance with the International Public Sector Accounting Standards (IPSAS), the Public Financial Management Act 2016, (Act 921), the Public Financial Management Regulation 2019, L.I 2378, and the current Chart of Accounts of the Government of Ghana.
ii) The Development Partner grants received from the Health Care Fund, an international organization that provides free medical care to the rural poor and vulnerable individuals, are typically unconditional. However, 40% of this year’s grant is subject to certain conditions, which had not been met as of December 31, 2023.
iii) Rent received in advance during the year amounted to GH¢20,000 while rent owed by the hospital for the year amounts to GH¢300,000.
iv) The hospital charges consumption of fixed assets on straight line basis as follows

Non-current Assets	Estimated Useful Life
Furniture and office equipment	5 years
Medical equipment and accessories	4 years
Motor vehicles	5 years
Buildings	10 years

Land constitutes 30% of the amount of land and building shown in the trial balance.
v) A medical equipment valued at GH¢20,000,000 which is included in the medical equipment and accessories listed on the trial balance, was completely damaged due to consistent power fluctuations. The value of this equipment should be written off.
vi) The hospital submitted a claim of GH¢11,000,000 to the National Health Insurance Scheme for services provided to patients in the last quarter of 2023, but the payment has not yet been received. This transaction has not yet been reflected in the trial balance.
vii) The hospital took a loan of $100,000,000 from Health World Bank on January 1, 2023, when the exchange rate was $1 to GH¢3.50. The exchange rate on 31 December 2023 is $1 to GH¢5.
viii) The inventories on 31 December 2023 were as follows:

Inventory type	Cost	Net Realizable Value	Current Replacement
	GHc’000	GHc’000	GHc’000
Drugs	15,000	16,000	14,000
Medical consumables	10,000	11,000	9,000

Required:
Prepare for Hamile Teaching Hospital:
a) Statement of Financial Performance for the year ended 31 December 2023.

b) Statement of Financial Position as of 31 December 2023.

c) Disclosure notes to the financial statements.

Answer

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Topic: Preparation and presentation of financial statements for covered entities
Series: MARCH 2025

PSAF – Nov 2024 – L2 – Q2a – Valuation of Legacy Fixed Assets

Valuation and accounting treatment of legacy fixed assets in compliance with IPSAS.

Question

The Ministry of Indigenous Enterprises has been charged to collect legacy fixed assets data and value them in accordance with International Public Sector Accounting Standards (IPSAS). The Fixed Assets Coordinating Unit (FACU) of the Ministry has collected for valuation the following data for your action:

The Ministry owns a four (4) storey Office Administration block. The average cost per floor is GH¢4,741,256.25. The building was constructed on a land size of 20 plots of land owned by the Ministry. Currently, a plot of land in that area costs GH¢2,500,000. The FACU has measured the sizes of the building as follows:

Length: 87.5 meters
Width: 42.65 meters
Reference Price per Square Meter: GH¢4,432

However, a professional body, the Institute of Architects and Engineers, has given the reference price for the cost of such an office building at an estimated price of GH¢87,965,025. The building has not seen any further facelift ever since. However, a fence wall with a gate to enforce security and secure the land has just been completed in the current year at a cost of GH¢8,970,000 with a lifespan of 50 years.

The year of construction of the office building could not be determined, yet an old watchman who had been there for ages remembers that the building was constructed some 42 years ago, a time when his seventh child was born. It is the decision of the Government of Ghana on the adoption of IPSAS not to take advantage of the three-year exemption period but to account for legacy fixed assets by taking 60% of the reference cost of the legacy assets as the deemed cost, with a reduced lifespan of 30 years.

Required:

i) Calculate the cost of the land and buildings with structures to be brought into the books on the adoption of IPSAS and determine the depreciation chargeable in the first year in respect of these assets. ii) Show the extract of Statement of Financial Position of the Ministry of Indigenous
Enterprises as at that date

Answer

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Tags: Depreciation, Financial Statements, Fixed Assets, IPSAS, Public Sector, Valuation
Level: Level 2

PSAF – Nov 2024 – L2 – Q1b – Statement of Financial Position for Paja Teaching Hospital

Prepare a Statement of Financial Position for Paja Teaching Hospital as at 31 December 2023 in compliance with IPSAS and government regulations.

Question

Prepare a Statement of Financial Position of Paja Teaching Hospital as at 31 December 2023 in compliance with IPSAS, the PFM Act, and the Chart of Accounts of the Government of Ghana.

Answer

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Tags: Accrual Accounting, Assets, Equity, Financial Statements, IPSAS, Liabilities, Public Sector Accounting, Statement of Financial Position
Level: Level 2

Topic: Preparation and presentation of financial statements for central governmen
Series: Nov 2024

PSAF – Nov 2024 – L2 – Q1a – Financial Statements Preparation

Prepare the Statement of Financial Performance for Paja Teaching Hospital following IPSAS guidelines.

Question

Below is a Trial Balance of Paja Teaching Hospital (PTH) under the Ministry of Health for the year ended 31 December 2023.

Debit (GH¢000)	Credit (GH¢000)
Cash and Bank – GoG	3,400
Cash and Bank – IGF	72,200
Cash and Bank – Donor Funds	210,400
Undeposited Cash – IGF	4,000
Petty Cash	100
Investments	2,000
Debtors	661,400
Other Receivables	17,700
Withholding Tax
Trust Funds
Trade Payables
GoG Subsidy – Employee Compensation
GoG Subsidy – Goods & Services
Development Partners Programmes Receipt
Other Non-Operating Income
Medicines & Pharmaceuticals	433,900
Surgical	50,800
Medical	111,400
Investigation	140,900
OPD	238,400
Obstetrics and Gynaecology	135,300
Dental	8,300
Pediatrics	40,300
Ear, Nose & Throat	5,300
Eye Care	7,300
Mortuary	30,000
Ambulance Fees	300
Ophthalmology	3,000
Physiotherapy	3,300
Examination Fees	200
Dialysis	400
Feeding	30,400
Employee Compensation – GoG	3,912,500
Goods & Services – GoG	20,800
Employee Compensation – IGF	148,000
Goods & Services – IGF	978,500
Capital Expenditure – IGF	27,500
Goods & Services – Partners Fund	472,400
Accumulated Fund
Total	6,530,900

Additional Information:

The hospital previously used modified accrual accounting but switched to IPSAS accrual basis in 2023.
The hospital revalued legacy assets as follows:
- Motor Vehicles: GH¢50,250,000
- Buildings: GH¢120,540,000
- Medical Equipment & Other Equipment: GH¢31,500,000
- Land: GH¢15,000,000
Gavi supported the hospital with GH¢200,000,000 in 2023, but 20% was allocated for Q1 of 2024. The Global Fund committed GH¢250,000,000, but only GH¢200,000,000 was received.
NHIA rejected 10% of the hospital’s total claims of GH¢100,300,000.
Parliament approved a write-off of GH¢20,225,000 for unpaid hospital services.
The capital expenditure consists of:
- Medical Equipment: GH¢19,236,000
- Furniture & Fittings: GH¢8,264,000
Depreciation Policy (Straight-Line Basis):
- Building: 5%
- Motor Vehicle: 20%
- Medical Equipment: 10%
- Furniture & Fitting: 25%
Year-end inventory values:

Inventory Type	Cost (GH¢000)	Replacement Cost (GH¢000)	Net Realisable Value (GH¢000)
Medicines (for resale)	146,800	176,100	132,100
Medical Consumables (For use on clients)	29,400	33,800	30,800
Office Consumables	19,600	29,400	18,600

Required:

In compliance with IPSAS, the PFM Act, and the Government of Ghana Chart of Accounts, prepare:
a) A Statement of Financial Performance for Paja Teaching Hospital for the year ended 31 December 2023.

Answer

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Tags: Accrual Accounting, Expenditure, Financial Statements, IPSAS, Public Sector Accounting, Revenue, Statement of Financial Performance, Trial Balance
Level: Level 2

Topic: Preparation and presentation of financial statements for central government
Series: Nov 2024

PSAF – May 2021 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)

Explain differences between accrual and cash accounting, justify IPSAS adoption, and describe commitment accounting benefits.

Question

You have received an official memo from your Permanent Secretary, which reads:

Director of Account and Finance: Hope you are doing well. We have just closed from a workshop organised by the Ministry of Finance on public finance management not long ago, and the discussion was all about the adoption of IPSAS accrual accounting in the public sector. It was emphasised that migration from IPSAS Cash Basis to IPSAS Accrual Basis is necessary to improve financial reporting and transparency in the public sector. You know I have little knowledge in accounting, so I was completely lost in the discussions and I wished you had attended the workshop with me.

Another issue discussed was commitment accounting. We were made to understand that commitment accounting strengthens public finance management and therefore all Ministries, Departments and Agencies (MDAs) must ensure that every expenditure is committed in accordance with the appropriation prior to spending.

Please could you help me with some information on these issues?

Required:
Explain to the Permanent Secretary:
i. THREE differences between accrual accounting and cash accounting. (3 Marks)
ii. THREE justifications for adopting IPSAS accrual accounting in the public sector. (3 Marks)
iii. The term “commitment accounting” and illustrate THREE ways it could strengthen public financial management. (4 Marks)

Answer

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Tags: Accrual Basis, Cash Basis, Financial Transparency, IPSAS, Public Finance Management
Level: Level 2

Topic: International public sector accounting standards
Series: MAY 2021

PSAF – May 2024 – L2 – SB – Q2 – International Public Sector Accounting Standards (IPSAS)

Disclosures and interpretation of financial statements for public sector investments.

Question

a. IPSAS 36 – Investments in Associates and Joint Ventures is a replacement of IPSAS 7 on Accounting for Investments in Associates.

You are required to:

Identify and briefly explain FOUR disclosures that should be made in the accounts on investments in associates. (8 Marks)

b. Interpretation of public sector financial statements is necessary in order to take decisive action in the public sector activities.

You are required to:

Identify and briefly explain THREE ways through which comparison of figures in respect of two or more years can be derived. (12 Marks)

Answer

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Tags: Financial Reporting, Investments, IPSAS
Level: Level 2

Topic: International public sector accounting standards
Series: MAY 2024

PSAF – Nov 2016 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)

This question discusses the benefits of adopting IPSAS in public sector accounting, focusing on transparency, accountability, and credibility improvements.

Question

Enumerate any FOUR benefits in the adoption of Public Sector Accounting Standards (IPSAS).

Answer

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Tags: Accrual Accounting, Financial Reporting, IPSAS, Public Sector Reforms
Level: Level 2

Topic: International public sector accounting standards
Series: NOV 2016

PSAF – Nov 2016 – L2 – Q2a – International Public Sector Accounting Standards (IPSAS)

This question outlines the benefits of migrating from IPSAS-CASH to IPSAS-ACCRUAL basis for public sector accounting.

Question

In an effort to promote accountability and transparency in governance, the
administration has adopted and implemented the International Public Sector
Accounting Standards (IPSAS) from January 2014. The governments (Federal, State,
Local) and other public institutions adopted IPSAS in the reporting and presentation
of financial statements to improve the quality and comparability of financial
information, and to be in conformity with other advanced nations of the world. IPSASCASH is already adopted in the budgeting, accounting and presentation of financial
statements, while IPSAS-ACCRUAL takes effect from January 2016.
You are required to:

Identify any SIX benefits of migration from IPSAS-CASH basis to IPSAS ACCRUAL basis.

Answer

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Tags: Accrual Accounting, Cash Basis, Financial Reporting, IPSAS, Public Sector Reforms
Level: Level 2

Topic: International public sector accounting standards
Series: NOV 2016

PSAF – Nov 2019 – L2 – Q1 – Public Sector Financial Statements

Prepare financial statements and journal entries for Ogogo Local Government based on trial balance and transactions provided, and identify external controls and challenges.

Question

Ogogo Local Government is one of the 26 Local Governments in Alimosho state of
Federal Republic of Wazobia. The Local Government has adopted Treasury Single
Accounting (Direct method) and prepares its accounts using IPSAS accrual basis.
There has been wide spread fraud since the retirement of the Treasurer of the
council about two years ago. However, there was no adequate information to
suggest that there was fraud or misappropriation of funds. The Chairman invited
you to his office as the new Treasurer and handed over some of the financial data
from treasury department to you as detailed below:
The trial balance for the year ended December 31, 2017 is as follows:

The following transactions took place in the Office of the Treasurer of the Local
Government for the year ended December 31, 2018.
i. Listed below are the revenue and expenditure items for the year ended December 31, 2018

(ii) Code 1 is used as prefix for revenue, 2 for recurrent expenditure and 4 for
capital expenditure
(iii) Preliminary investigations carried out revealed the following irregularities,
which occurred and were discovered within the year:
• Included in the payments for the expenses under primary health care department were various duplicated vouchers amounting to N7million;
• There were some falsifications in the bills for items bought for the provision of water under other charges. The total discrepancies amounted to N3million.
(iv) The following agreed revenue demand notices were sent to the indigenes of the Local Government during the year.

(v) Included in the payments under works and housing is the cost of motor
vehicles of N25 million while medical equipment costing N35 million was
included in primary health care department expenses.
(vi) Included in the payments under works and housing is the cost of land
including construction of access roads, certificate of occupancy etc, amounting
to N100 million. The land was acquired by the Local Government and sold to
local prospective land owners at a cost of N520,000 per plot. The land consists
of 200 standard plots for the construction of houses of their choice. Only 150
plots were fully subscribed and paid for during the year.
(vii) Included in the payments under finance department is the cost of office
stationery of N25 million while the value of office stationery based on stock
sheet as at December 31, 2018 was N6.5 million.

viii) Capital grant from the State Government was received on December 31, 2017
and utilised in 2018.
(ix) The capital expenditure paid during the year was for the acquisition of land for the new Local Government Health Centers.
(x) Some of the accounting policies for depreciation adopted by the Government include the following depreciation rates;

Note: All non-current assets were purchased at the beginning of the
year.
(xi) The following expenses were incurred but not settled as at end of the year.

You are required to prepare:
a. The journal entries to record the loss of fund (3 Marks)
b. The statements of financial performance for year ended December 31, 2018
(15 Marks)
c. The statement of financial position as at December, 31 2018 (17 Marks)
d. Identify FIVE external controls and FIVE problems of Local Government in
Nigeria (5 Marks)

Answer

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Tags: Financial Performance, Financial Position, IPSAS, Local Government Finance, Public Sector Accounting
Level: Level 2

Topic: Public Sector Financial Statements
Series: NOV 2019

PSAF – Nov 2020 – L2 – Q1 – International Public Sector Accounting Standards (IPSAS)

Discuss IPSAS transition exemptions and prepare financial statements for Oranta State Government using IPSAS accrual.

Question

IPSAS 33, gives a transition relief (exemption) of up to three years within which to develop models for transiting to IPSAS accrual. However, the government of Nigeria adopted accrual IPSAS on revenue from exchange transactions effective January 1, 2016.

Oranta State Government mandated the Accountant-General of the State to implement the IPSAS accrual in the preparation of their financial statements with effect from January 2018 which was complied with accordingly.

For the smooth implementation of IPSAS accrual, the State Executive Council approved the following:

(i) Asset valuation committee to be chaired by the Deputy Governor with the Commissioner of Finance, Commissioner of Budget and Planning, Chairman State Internal Revenue Service, Accountant-General of the State, and Head of Service as members while a Director in the Office of the Secretary to the State Government was appointed as the Secretary.
(ii) The Committee was mandated to value all the State assets and liabilities on or before the implementation of IPSAS accrual.
(iii) The Committee was allowed to engage the services of competent valuers for the job.
(iv) The valuation of the assets and liabilities should be on a continuous basis and any value agreed and approved by the State Executive Council should be brought into the books in the year of valuation.
(v) All assets and liabilities incurred after implementation of IPSAS accrual should be recognized in the year they occurred.

The consolidated trial balance for the year ended December 31, 2017, based on IPSAS cash is as follows:

Extracted consolidated cashbook for the year 2018:

The following information is relevant:
(i) The employees‟ salaries and wages bill for the month of December 2018
amounting to N6.5billion was outstanding at the end of the year.
(ii) The following information was extracted from the unit in charge of
accounting for property, plant and equipment (PPE): 100 sets of HP
computers were received from Koko Computers Limited to assist the State
government to eradicate ghost workers from the payroll- the HP series
P1120, 2016 model. Based on this information, a call was made to three of
their computer suppliers to find out the current price of the HP P1120. Two of
the suppliers quoted N450,000 each, while one quoted N500,500 each.
Based on this information, the fair value of the computers, were taken as
N500,000 each.
(iii) The government during the year received an asset valuation report from the
Asset Valuation Committee that was set up to carry out the valuation of the
old assets and liabilities of the State.
(iv) The following values were recommended and approved by the State
Executive Council respectively:

(v) Pension and gratuity of N15 billion was outstanding at the end of the year
(vi) Some of the accounting policies adopted by the government for depreciation
include the following rates;

(vii) During the year, one of the contractors took the State to court for breach of
contract. The case was still in court as at the end of the year and from all
indications, judgment will eventually be in his favour. The legal adviser
estimated the judgment debt to be N50million.
(viii) Value of office consumables based on inventory sheet as at December 31,
2018 was N550million.
(ix) The following expenses were incurred but not settled as at end of the year.

(x) An extract from the foreign loan amortisation schedule indicates that a total
sum of N32billion comprising principal and interest of N2billion was due
and paid during the year. Also domestic loan of N13billion comprising
principal and interest of N1billion was paid during the year. The interest
payable on domestic and external loans at the end of the year amounted to
N3billion and N5 billion respectively.
(xi) The investment of 10% treasury bills for 360 days was due to mature on
January 1, 2018 and reinvested immediately for another term.
(xii) The revolving loan attracts interest of 4% per annum and it is paid along
with the principal.
Required:
a. In line with the provisions of IPSAS 33, explain how the following revenue
from exchange transactions should be recognised:
i. Aid and grants receivable as at December 31, 2015 (2 Marks)

ii. Debt forgiveness approved on or after January 1, 2016 (2 Marks)
iii. Personal income tax on or after January 1, 2016 (2 Marks)
b. Prepare in vertical form:
i. Statement of financial performance for the year December 31, 2018.
(17 Marks)
ii. Statement of financial position for the year December 31, 2018.
(17 Marks)
(Total 40 Marks)

Answer

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Tags: Accrual Basis, Asset Valuation, Government Accounting, IPSAS, Revenue Recognition
Level: Level 2

Topic: International public sector accounting standards
Series: NOV 2020

PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities

Prepare the Statement of Financial Performance for Hamile Teaching Hospital for 2023 per IPSAS and related regulations.

Question

The Trial Balance below relates to Hamile Teaching Hospital, a public hospital.

Trial Balance for the year ended 31 December 2023
	Debit	Credit
	GHc’000	GHc’000
Government subvention		100,750
Out-patient services fees		35,000
In-patient services fees		40,000
Development Partner grants (ii)		16,000
Established position salaries	62,000
Casual Labour	5,600
Contract appointment (local and foreign)	1,400
Limited engagements	200
Rent (iii)	500	150
Insurance	340
Consultancy services	120
Conferences, workshops and training	4,500
Purchase of drugs	60,000
Purchase of medical consumables	80,000
Office expenses	20,000
Repairs and maintenance	6,000
Interest on loan	10,000
Pharmacy sales		180,000
Diagnostic		85,000
Mortuary Services		9,400
Cafeteria and Canteen		4,650
Extension services		14,500
Furniture and office equipment (iv)	200,000	40,000
Medical equipment & accessories (iv & v)	420,000	120,000
Motor vehicles (iv)	120,000	20,000
Land and buildings (iv)	300,000	70,000
Bank and Cash	30,000
Receivable from National Health Insurance Scheme (vi)	65,000
Receivable from patients	15,000
Payables		26,000
Loan from foreign Institution (2028) (vii)		350,000
Inventory of drugs	22,000
Inventory of medical consumables	12,000
Accumulated Fund		336,210
Other expenses	13,000
	1,447,660	1,447,660

Non-current Assets	Estimated Useful Life
Furniture and office equipment	5 years
Medical equipment and accessories	4 years
Motor vehicles	5 years
Buildings	10 years

Inventory type	Cost	Net Realizable Value	Current Replacement
	GHc’000	GHc’000	GHc’000
Drugs	15,000	16,000	14,000
Medical consumables	10,000	11,000	9,000

Required:
Prepare for Hamile Teaching Hospital:
a) Statement of Financial Performance for the year ended 31 December 2023.

b) Statement of Financial Position as of 31 December 2023.

c) Disclosure notes to the financial statements.

Answer

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Topic: Preparation and presentation of financial statements for covered entities
Series: MARCH 2025

PSAF – Nov 2024 – L2 – Q2a – Valuation of Legacy Fixed Assets

Valuation and accounting treatment of legacy fixed assets in compliance with IPSAS.

Question

Length: 87.5 meters
Width: 42.65 meters
Reference Price per Square Meter: GH¢4,432

Required:

Answer

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Tags: Depreciation, Financial Statements, Fixed Assets, IPSAS, Public Sector, Valuation
Level: Level 2

PSAF – Nov 2024 – L2 – Q1b – Statement of Financial Position for Paja Teaching Hospital

Prepare a Statement of Financial Position for Paja Teaching Hospital as at 31 December 2023 in compliance with IPSAS and government regulations.

Question

Prepare a Statement of Financial Position of Paja Teaching Hospital as at 31 December 2023 in compliance with IPSAS, the PFM Act, and the Chart of Accounts of the Government of Ghana.

Answer

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Tags: Accrual Accounting, Assets, Equity, Financial Statements, IPSAS, Liabilities, Public Sector Accounting, Statement of Financial Position
Level: Level 2

Topic: Preparation and presentation of financial statements for central governmen
Series: Nov 2024

PSAF – Nov 2024 – L2 – Q1a – Financial Statements Preparation

Prepare the Statement of Financial Performance for Paja Teaching Hospital following IPSAS guidelines.

Question

Below is a Trial Balance of Paja Teaching Hospital (PTH) under the Ministry of Health for the year ended 31 December 2023.

Debit (GH¢000)	Credit (GH¢000)
Cash and Bank – GoG	3,400
Cash and Bank – IGF	72,200
Cash and Bank – Donor Funds	210,400
Undeposited Cash – IGF	4,000
Petty Cash	100
Investments	2,000
Debtors	661,400
Other Receivables	17,700
Withholding Tax
Trust Funds
Trade Payables
GoG Subsidy – Employee Compensation
GoG Subsidy – Goods & Services
Development Partners Programmes Receipt
Other Non-Operating Income
Medicines & Pharmaceuticals	433,900
Surgical	50,800
Medical	111,400
Investigation	140,900
OPD	238,400
Obstetrics and Gynaecology	135,300
Dental	8,300
Pediatrics	40,300
Ear, Nose & Throat	5,300
Eye Care	7,300
Mortuary	30,000
Ambulance Fees	300
Ophthalmology	3,000
Physiotherapy	3,300
Examination Fees	200
Dialysis	400
Feeding	30,400
Employee Compensation – GoG	3,912,500
Goods & Services – GoG	20,800
Employee Compensation – IGF	148,000
Goods & Services – IGF	978,500
Capital Expenditure – IGF	27,500
Goods & Services – Partners Fund	472,400
Accumulated Fund
Total	6,530,900

Additional Information:

The hospital previously used modified accrual accounting but switched to IPSAS accrual basis in 2023.
The hospital revalued legacy assets as follows:
- Motor Vehicles: GH¢50,250,000
- Buildings: GH¢120,540,000
- Medical Equipment & Other Equipment: GH¢31,500,000
- Land: GH¢15,000,000
Gavi supported the hospital with GH¢200,000,000 in 2023, but 20% was allocated for Q1 of 2024. The Global Fund committed GH¢250,000,000, but only GH¢200,000,000 was received.
NHIA rejected 10% of the hospital’s total claims of GH¢100,300,000.
Parliament approved a write-off of GH¢20,225,000 for unpaid hospital services.
The capital expenditure consists of:
- Medical Equipment: GH¢19,236,000
- Furniture & Fittings: GH¢8,264,000
Depreciation Policy (Straight-Line Basis):
- Building: 5%
- Motor Vehicle: 20%
- Medical Equipment: 10%
- Furniture & Fitting: 25%
Year-end inventory values:

Inventory Type	Cost (GH¢000)	Replacement Cost (GH¢000)	Net Realisable Value (GH¢000)
Medicines (for resale)	146,800	176,100	132,100
Medical Consumables (For use on clients)	29,400	33,800	30,800
Office Consumables	19,600	29,400	18,600

Required:

Answer

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Tags: Accrual Accounting, Expenditure, Financial Statements, IPSAS, Public Sector Accounting, Revenue, Statement of Financial Performance, Trial Balance
Level: Level 2

Topic: Preparation and presentation of financial statements for central government
Series: Nov 2024

PSAF – May 2021 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)

Explain differences between accrual and cash accounting, justify IPSAS adoption, and describe commitment accounting benefits.

Question

You have received an official memo from your Permanent Secretary, which reads:

Director of Account and Finance: Hope you are doing well. We have just closed from a workshop organised by the Ministry of Finance on public finance management not long ago, and the discussion was all about the adoption of IPSAS accrual accounting in the public sector. It was emphasised that migration from IPSAS Cash Basis to IPSAS Accrual Basis is necessary to improve financial reporting and transparency in the public sector. You know I have little knowledge in accounting, so I was completely lost in the discussions and I wished you had attended the workshop with me.

Another issue discussed was commitment accounting. We were made to understand that commitment accounting strengthens public finance management and therefore all Ministries, Departments and Agencies (MDAs) must ensure that every expenditure is committed in accordance with the appropriation prior to spending.

Please could you help me with some information on these issues?

Answer

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Tags: Accrual Basis, Cash Basis, Financial Transparency, IPSAS, Public Finance Management
Level: Level 2

Topic: International public sector accounting standards
Series: MAY 2021

PSAF – May 2024 – L2 – SB – Q2 – International Public Sector Accounting Standards (IPSAS)

Disclosures and interpretation of financial statements for public sector investments.

Question

a. IPSAS 36 – Investments in Associates and Joint Ventures is a replacement of IPSAS 7 on Accounting for Investments in Associates.

You are required to:

Identify and briefly explain FOUR disclosures that should be made in the accounts on investments in associates. (8 Marks)

b. Interpretation of public sector financial statements is necessary in order to take decisive action in the public sector activities.

You are required to:

Identify and briefly explain THREE ways through which comparison of figures in respect of two or more years can be derived. (12 Marks)

Answer

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Tags: Financial Reporting, Investments, IPSAS
Level: Level 2

Topic: International public sector accounting standards
Series: MAY 2024

PSAF – Nov 2016 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)

This question discusses the benefits of adopting IPSAS in public sector accounting, focusing on transparency, accountability, and credibility improvements.

Question

Enumerate any FOUR benefits in the adoption of Public Sector Accounting Standards (IPSAS).

Answer

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Tags: Accrual Accounting, Financial Reporting, IPSAS, Public Sector Reforms
Level: Level 2

Topic: International public sector accounting standards
Series: NOV 2016

PSAF – Nov 2016 – L2 – Q2a – International Public Sector Accounting Standards (IPSAS)

This question outlines the benefits of migrating from IPSAS-CASH to IPSAS-ACCRUAL basis for public sector accounting.

Question

Identify any SIX benefits of migration from IPSAS-CASH basis to IPSAS ACCRUAL basis.

Answer

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Tags: Accrual Accounting, Cash Basis, Financial Reporting, IPSAS, Public Sector Reforms
Level: Level 2

Topic: International public sector accounting standards
Series: NOV 2016

PSAF – Nov 2019 – L2 – Q1 – Public Sector Financial Statements

Prepare financial statements and journal entries for Ogogo Local Government based on trial balance and transactions provided, and identify external controls and challenges.

Question

Note: All non-current assets were purchased at the beginning of the
year.
(xi) The following expenses were incurred but not settled as at end of the year.

Answer

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Tags: Financial Performance, Financial Position, IPSAS, Local Government Finance, Public Sector Accounting
Level: Level 2

Topic: Public Sector Financial Statements
Series: NOV 2019

PSAF – Nov 2020 – L2 – Q1 – International Public Sector Accounting Standards (IPSAS)

Discuss IPSAS transition exemptions and prepare financial statements for Oranta State Government using IPSAS accrual.

Question

For the smooth implementation of IPSAS accrual, the State Executive Council approved the following:

The consolidated trial balance for the year ended December 31, 2017, based on IPSAS cash is as follows:

Extracted consolidated cashbook for the year 2018:

(v) Pension and gratuity of N15 billion was outstanding at the end of the year
(vi) Some of the accounting policies adopted by the government for depreciation
include the following rates;

Answer

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Tags: Accrual Basis, Asset Valuation, Government Accounting, IPSAS, Revenue Recognition
Level: Level 2

Topic: International public sector accounting standards
Series: NOV 2020

Question Tag: IPSAS

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PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities

Prepare the Statement of Financial Performance for Hamile Teaching Hospital for 2023 per IPSAS and related regulations.

You're reporting an error for "PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities"

PSAF – Nov 2024 – L2 – Q2a – Valuation of Legacy Fixed Assets

Valuation and accounting treatment of legacy fixed assets in compliance with IPSAS.

You're reporting an error for "PSAF – Nov 2024 – L2 – Q2a – Valuation of Legacy Fixed Assets"

PSAF – Nov 2024 – L2 – Q1b – Statement of Financial Position for Paja Teaching Hospital

Prepare a Statement of Financial Position for Paja Teaching Hospital as at 31 December 2023 in compliance with IPSAS and government regulations.

You're reporting an error for "PSAF – Nov 2024 – L2 – Q1b – Statement of Financial Position for Paja Teaching Hospital"

PSAF – Nov 2024 – L2 – Q1a – Financial Statements Preparation

Prepare the Statement of Financial Performance for Paja Teaching Hospital following IPSAS guidelines.

Additional Information:

Required:

You're reporting an error for "PSAF – Nov 2024 – L2 – Q1a – Financial Statements Preparation"

PSAF – May 2021 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)

Explain differences between accrual and cash accounting, justify IPSAS adoption, and describe commitment accounting benefits.

You're reporting an error for "PSAF – May 2021 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)"

PSAF – May 2024 – L2 – SB – Q2 – International Public Sector Accounting Standards (IPSAS)

Disclosures and interpretation of financial statements for public sector investments.

You're reporting an error for "PSAF – May 2024 – L2 – SB – Q2 – International Public Sector Accounting Standards (IPSAS)"

PSAF – Nov 2016 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)

This question discusses the benefits of adopting IPSAS in public sector accounting, focusing on transparency, accountability, and credibility improvements.

You're reporting an error for "PSAF – Nov 2016 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)"

PSAF – Nov 2016 – L2 – Q2a – International Public Sector Accounting Standards (IPSAS)

This question outlines the benefits of migrating from IPSAS-CASH to IPSAS-ACCRUAL basis for public sector accounting.

You're reporting an error for "PSAF – Nov 2016 – L2 – Q2a – International Public Sector Accounting Standards (IPSAS)"

PSAF – Nov 2019 – L2 – Q1 – Public Sector Financial Statements

Prepare financial statements and journal entries for Ogogo Local Government based on trial balance and transactions provided, and identify external controls and challenges.

You're reporting an error for "PSAF – Nov 2019 – L2 – Q1 – Public Sector Financial Statements"

PSAF – Nov 2020 – L2 – Q1 – International Public Sector Accounting Standards (IPSAS)

Discuss IPSAS transition exemptions and prepare financial statements for Oranta State Government using IPSAS accrual.

You're reporting an error for "PSAF – Nov 2020 – L2 – Q1 – International Public Sector Accounting Standards (IPSAS)"

PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities

Prepare the Statement of Financial Performance for Hamile Teaching Hospital for 2023 per IPSAS and related regulations.

You're reporting an error for "PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities"

PSAF – Nov 2024 – L2 – Q2a – Valuation of Legacy Fixed Assets

Valuation and accounting treatment of legacy fixed assets in compliance with IPSAS.

You're reporting an error for "PSAF – Nov 2024 – L2 – Q2a – Valuation of Legacy Fixed Assets"

PSAF – Nov 2024 – L2 – Q1b – Statement of Financial Position for Paja Teaching Hospital

Prepare a Statement of Financial Position for Paja Teaching Hospital as at 31 December 2023 in compliance with IPSAS and government regulations.

You're reporting an error for "PSAF – Nov 2024 – L2 – Q1b – Statement of Financial Position for Paja Teaching Hospital"

PSAF – Nov 2024 – L2 – Q1a – Financial Statements Preparation

Prepare the Statement of Financial Performance for Paja Teaching Hospital following IPSAS guidelines.

Additional Information:

Required:

You're reporting an error for "PSAF – Nov 2024 – L2 – Q1a – Financial Statements Preparation"

PSAF – May 2021 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)

Explain differences between accrual and cash accounting, justify IPSAS adoption, and describe commitment accounting benefits.

You're reporting an error for "PSAF – May 2021 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)"

PSAF – May 2024 – L2 – SB – Q2 – International Public Sector Accounting Standards (IPSAS)

Disclosures and interpretation of financial statements for public sector investments.

You're reporting an error for "PSAF – May 2024 – L2 – SB – Q2 – International Public Sector Accounting Standards (IPSAS)"

PSAF – Nov 2016 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)

This question discusses the benefits of adopting IPSAS in public sector accounting, focusing on transparency, accountability, and credibility improvements.

You're reporting an error for "PSAF – Nov 2016 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)"

PSAF – Nov 2016 – L2 – Q2a – International Public Sector Accounting Standards (IPSAS)

This question outlines the benefits of migrating from IPSAS-CASH to IPSAS-ACCRUAL basis for public sector accounting.

You're reporting an error for "PSAF – Nov 2016 – L2 – Q2a – International Public Sector Accounting Standards (IPSAS)"

PSAF – Nov 2019 – L2 – Q1 – Public Sector Financial Statements

Prepare financial statements and journal entries for Ogogo Local Government based on trial balance and transactions provided, and identify external controls and challenges.

You're reporting an error for "PSAF – Nov 2019 – L2 – Q1 – Public Sector Financial Statements"

PSAF – Nov 2020 – L2 – Q1 – International Public Sector Accounting Standards (IPSAS)

Discuss IPSAS transition exemptions and prepare financial statements for Oranta State Government using IPSAS accrual.

You're reporting an error for "PSAF – Nov 2020 – L2 – Q1 – International Public Sector Accounting Standards (IPSAS)"

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