10 Accounting policies: Accounting policies are the specific principles, bases, conventions, rules and practices applied by WHO in preparing and presenting financial statements. As per Financial Regulation XIII, the accounts are maintained in accordance with International Public Sector Accounting Standards (IPSAS).
20 Accrual basis: WHO follows the accrual basis of accounting. Under the accrual basis, the effects of transactions and other events are recognized when they occur (and not only when cash or its equivalent is received or paid). Therefore, the transactions and events are recorded in the accounting records and reported in the financial statements of the financial periods to which they relate. The elements recognized under accrual accounting are assets, liabilities, net assets/equity, revenue and expenses. The accrual basis of accounting requires organizations to maintain complete records of assets and liabilities, and provide information on revenues and expenses including the impact of transactions where cash has not yet been received or paid.
30 Going concern: WHO financial statements are prepared on a going concern basis meaning that WHO will continue in operation for the foreseeable future. Hence, it is assumed that WHO has neither the intention nor the need to liquidate or reduce materially the scale of its operations; if there is such an intention or need, the financial statements may have to be prepared on a different basis and, if so, the basis used will be disclosed.
40 Understandability: An essential quality of the information provided in financial statements is that it is readily understandable by users. For this purpose, users are assumed to have a reasonable knowledge of the entity's activities and the environment in which it operates, and a willingness to study the information. However, information about complex matters would not be excluded from the financial statements merely on the grounds that it may be too difficult for certain users to understand.
50 Relevance: To be useful, information must be relevant to the decision-making needs of the users of financial reports. Information has the quality of relevance to users if it can be used to assist in evaluating past, present or future events, or in confirming or correcting past evaluations.
- Timeliness: In order to be relevant, information must also be timely. Timeliness means having information available to users before it loses its capacity to be useful for accountability and decision-making purposes.
- Materiality: WHO applies principles of materiality when assessing the effect of an omission or misstatement which could influence decisions of users of the statements. As a general principle a materiality threshold of total expenditure is applied when assessing effect on consolidated financial statements.
60 Reliability: Information has the quality of reliability when it is free from material error and bias, and can be depended upon by users to faithfully represent that which it either purports to represent or could reasonably be expected to represent.
- Faithful representation: For information to represent faithfully transactions and other events, it should be presented in accordance with the substance of the transactions and other events, and not merely its legal form.
- Substance Over Form: If information is to represent faithfully the transactions and other events that it purports to represent, it is necessary that it is accounted for and presented in accordance with its substance and economic reality and not merely its legal form. The substance of transactions or other events is not always consistent with its legal form.
- Neutrality: Information is neutral if it is free from bias. Financial statements are not neutral if the information it contains has been selected or presented in a manner designed to influence the making of a decision or judgment in order to achieve a predetermined result or outcome.
- Prudence: Prudence is the inclusion of a degree of caution in the exercise of the judgments needed in making the estimates required under conditions of uncertainty, such that assets or revenue are not overstated and liabilities or expenses are not understated.
- Completeness: The information in financial statements should be completed within the bounds of materiality and cost.
70 Consistency: WHO selects and applies its accounting policies consistently for similar transactions, other events and conditions during each financial period, unless another accounting policy permits categories for which a differing policy may be appropriate.
80 Comparability: The measurement and display of the financial effect of like transactions is undertaken in a consistent way in order for users to be able to compare the financial statements through time and to identify trends in its financial position and performance. WHO therefore will disclose the accounting policies used and any changes made thereon, in addition, when required by IPSAS, corresponding information for the preceding periods is restated when it is practical to do so.
90 Verifiability: Verifiability is a quality of information that helps assure users that information faithfully represents the phenomena that it purports to represent. Verifiability encompasses, and in some cases may be described as, supportability. This characteristic implies that the information included in the financial statements is supportable, and that it represents the phenomena it purports to represent or applies appropriate recognition, measurement or representation methods without material error or bias.
100 Offsetting: Assets and liabilities, and revenue and expenses are not offset unless required or permitted by a specific IPSAS standard. Principles of materiality are applied when accounting for reimbursable expenses.
110 Gains and losses from similar transactions: Gains and losses arising from a group of similar transactions are reported on a net basis, for example, foreign exchange gains and losses and gains and losses arising on financial instruments.
