IPSASB issues IPSAS 51 for natural resource accounting, effective 2028

The International Public Sector Accounting Standards Board issued IPSAS 51 on January 22, 2026, the first global framework for accounting tangible natural resources held for conservation, effective January 1, 2028. Indian governments and public entities gain guidance to bring environmental assets like water bodies and forests onto the balance sheet, integrating natural capital into public financial management.

The International Public Sector Accounting Standards Board issued IPSAS 51 on January 22, 2026, providing the first global accounting framework for tangible natural resources held for conservation purposes. It addresses a long-standing gap by bringing environmental assets onto the balance sheet. IPSAS 51 defines tangible natural resources as naturally occurring items with physical substance embodying service potential or economic benefits, primarily covering water bodies, subsoil resources, and living organisms like forests when held for protection rather than commercial exploitation.

The standard affects governments and public entities managing conserved natural resources. Recognition requires that service potential flow to the entity and be reliably measured, with the entity exercising control as a result of past events. Resources acquired in orderly markets are recorded at cost; those from non-exchange transactions are measured at current value. Subsequent measurement offers a choice between historical cost and current value models. A rebuttable presumption of indefinite useful lives means these assets generally are not depreciated.

IPSAS 51 becomes effective for annual financial statements beginning on or after January 1, 2028, with earlier application encouraged. It includes a disclosure exemption allowing entities to omit location or quantity details that could lead to degradation of rare or endangered species. Indian governments and public entities should prepare valuation and disclosure systems ahead of the 2028 effective date. The standard integrates environmental stewardship into public financial management, enabling citizens and markets to evaluate the sustainability of public finances through an ESG lens.

Key figure — Effective date: annual financial statements beginning on or after January 1, 2028