The International Public Sector Accounting Standards Board (IPSASB) has issued a new standard, IPSAS 51, on tangible natural resources held for conservation, to ensure that public sector entities worldwide can recognise the value of the resources they protect, making ‘invisible’ natural wealth visible to the public.
This standard will be effective globally on 1st January 2028, while in Kenya it will be effective on 1st July 2028; however, early adoption is permitted. The standard aims to provide transparency into how tangible natural resources held for conservation change over time and to reveal whether those resources are being restored or depleted. A tangible natural resource held for conservation is a naturally occurring tangible asset that is managed to prevent its degradation.
“The new global standard was developed because vital environmental assets, such as forests, water bodies, and national parks, have historically been omitted from financial statements due to a lack of standardized reporting guidance,” PSASB CEO, FCPA Georgina Muchai said.
The new standard provides a standardized guide for public-sector entities to recognize and report tangible natural resources, specifically when they are held for conservation purposes. This ensures that environmental resources move from mere disclosure to recognition and measurement for inclusion in the financial statements. By taking stock of natural resources, transparency is achieved through evidence-based data that reveal how their value changes over time. This ensures proper maintenance of the resources to avoid depletion and degradation and provides a clearer picture of the government’s true wealth.