RESTRICTED  
  
WT/BFA/W/572  
7 September 2021  
(21-6647) Page: 1/2 
Committee on Budget, Finance and Administration   
 
 
- 1 - REVIEW OF THE CHANGES TO THE TEXT OF FINANCIAL REGULATION  23 
AS PRESENTED IN 2019  
1  BACKGROUND  
1.1.  The revision of select Financial Regulations was first presented to the CBFA  on 17 June 2019 
and deliberated upon during several meetings through to November 2019. Due to the variant  
positions of some  delegations, the revised version of Financial Regulation 23 was not agreed by the 
Committee.  
2  SALIENT POINTS REGARDING THE CHANGES  
2.1.  The main objective of revising Financial Regulation  23 is to align it with International Public 
Sector Accounting Standards (IPSAS) requirements. The reflect ion of  the actuarial costs for the 
pension and After Service Health Insurance (ASHI) in the Stateme nt of Financial Performance and 
the long -term benefits payable in future for pension and ASHI in the Statement of Financial Position , 
are mandatory under IPSAS . 
2.2.  The reformulat ed Financial Regulation 23 defin es "budgetary result" and distinguish es it from 
the "financial result" . The budgetary result compares the budget to the actual expenditures. To arrive 
at the financial result, I PSAS adjustments such as the allocation to the Building Renovation Fund; 
acquisition, depreciation and amortisation of fixed ass ets; staff provisions and the actuarial valuation 
of pension and ASHI benefits  are factored into the budgetary result . 
2.3.  The difficulties posed by the requirement that the deficit in the Surplus Account be covered by 
transfers from the Working Capital Fund a nd, if this is insufficient, then the remainder having to be 
included in the next budget  are addressed by the amendments . 
2.4.  The paragraphs in Financial Regulation 23 are enumerated in order to improve clarity.  
2.5.  An explicit phrase is added to show that the CBF A will receive and consider the proposal by the 
Director -General regarding the utilization of the annual budgetary result  and, subsequently, make a 
recommendation to the General Council . 
2.6.  Modification of the phrase "budgetary surplus" to "budgetary savings" . 
2.7.  A Member said their delegation, as indicated in the previous meeting, had been the only one 
that had said no to the version of amendments to Financial Regulation 23 in 2019. The Member 
stated that their delegation had, in the last meeting of 2019, indica ted flexibility from the Capital 
that, in the spirit of cooperation, it would join other Members in agreeing on the text of this 
Financial  Regulation. In that case, it seems that there is no objection on the amended language of 
Financial Regulation 23.  
2.8.  A Member said their delegation's understanding was that the new version of 
Financial  Regulation 23 would be discussed. She asked for clarification as to the version of 
Financial  Regulation 23 that was to be discussed and said, though their delegation can liv e with the 
old version, it is of the view that discussion ought to continue from the version that had already 
been revised in November 2019.  WT/BFA/W/ 572 
 
- 2 - 
 
 - 2 - 2.9.  On 12 July, after some comments made by some Members regarding Financial Regulation 23, 
in the context of the proposed Revised Financial Regulations to be submitted to the General Council 
for approval, the Chair said that there is the question of a possible  revision of Financial Regulation  23 
and that her impression is that such a revision may require more time for discussions.  
2.10.   The Secretariat said if it is the Members' will that Financial Regulation 23 be included  in the 
complete set of revised Financial Regulations , it deserves to be presented to Members, as had been 
done with the eight Financial Regulations in the previous meeting. In this regard, the Official said 
the Secretariat will table this specific Financi al Regulation at the next CBFA meeting.  
3  REVISED FINANCIAL REGULATION 23  
23. a) The budgetary result is defined as the sum of assessed contributions and projected 
miscellaneous income, less, the sum of actual expenditure and actual miscellaneous income.  
 
b) The actual expenditure does not take into account the variations in the actuarial provisions for 
the long -term liabilities associated with staff pensions and After Service Health Insurance if they 
have not been included in the approved budget.  
 
c) The ann ual budgetary result shall be reported in the WTO Financial Performance Report. If, at the 
end of a financial period, the budgetary result shows a positive balance, this amount shall be 
transferred to the Surplus Account. The Director -General shall make sp ecific recommendations to 
the General Council, through the Committee, for the redistribution of the annual budgetary savings 
in any of the following ways1: 
 
   i) Application as income against the budget for the next applicable financial period following that 
in which the budgetary savings occur, thereby reducing Members' contributions.  
 
   ii) Transfer to the Working Capital Fund; or  
 
   iii) Transfer to the Reserves.  
 
d) If at the end of a financial period the budgetary result shows a deficit, this amoun t will be covered, 
to the extent possible, by transfer from the Working Capital Fund. Any part of the deficit left 
uncovered after transfer of funds from the Working Capital Fund shall be included in the budget for 
the next possible financial period.  
 
23 Bis. a) Assets are defined as r esources controlled by an entity as a result of past events and from 
which future economic benefits or service potential are expected to flow to the entity.  
 
b) Liabilities are defined as p resent obligations of the entity ar ising from past events, the settlement 
of which is expected to result in an outflow from the entity of resources embodying economic benefits 
or service potential.  
 
23 Ter. The sum  of the budgetary result for the period and IPSAS adjustments, including the actuarial 
provisions for pension and After Service Health Insurance, determine the WTO year -end financial 
result. The financial result is for information purposes only.  
 
__________  
 
1 The General Council may, if circums tances so require, authorise other ways to redistribute the positive annual 
budgetary result.