Navigating Treasury Circular No. 3 of 2025 by Elles Mukunyadze
Introduction
The Ministry of Finance, Economic Development and Investment Promotion issued Treasury Circular Number 3 of 2025, setting the stage for the preparation of 2024 transitional financial statements under the International Public Sector Accounting Standards (IPSAS). This marks a significant step in Zimbabwe’s public financial management reforms, promoting transparency, accountability, and alignment with global best practices.
Why This Circular Matters
Following the adoption of IPSAS through Statutory Instrument 41 of 2019, Zimbabwe’s government entities are expected to progressively align their financial reporting with accrual-based IPSAS by end of 2025. Circular No. 3 provides the detailed guidance for preparing either full or transitional IPSAS-compliant financial statements for the fiscal year ended 31 December 2024. The circular comes at a time when the current reporting environment is considered complex due the intersection of three inherently complex standards which include :
- IPSAS 33 First Time Adoption
- IPSAS 10 Financial Reporting in Hyperinflationary Economies
- IPSAS 4 The Effects of Changes in Foreign Exchange Rates
Key Submission Requirements
Entities are required to submit their IPSAS Financial Statements—whether full or transitional—by 30 April 2025. These must include:
- Statement of Financial Position
- Statement of Financial Performance
- Statement of Changes in Net Assets
- Cash Flow Statement
- Statement of Comparison of Budget and Actuals
- Notes to the Financial Statements
Supporting documents such as the Asset Register, Inventory Valuation Reports, Creditors and Debtors Listings, and Lease Schedules must also be submitted.
Special Considerations: Functional Currency and Hyperinflation
With the introduction of the Zimbabwe Gold (ZWG) currency on 5 April 2024, the functional and presentation currency has changed from ZWL to ZWG. The circular outlines detailed conversion procedures, including application of IPSAS 10 for hyperinflation and IPSAS 4 for currency changes.
Entities are guided on how to translate prior figures, prepare comparative data, and handle restatements. Whether or not an entity applied IPSAS 10 in 2023 significantly affects how it treats currency translation in 2024.
IPSAS 33 Transitional Exemptions
The circular emphasizes transparent disclosures under IPSAS 33 for entities taking transitional exemptions. These disclosures include the nature of exemptions used, adjustments made, and a roadmap for full IPSAS compliance in future reporting periods.
Asset Valuation and Transfers
The guide introduces practical steps for management-based asset valuation, especially for non-complex assets like furniture and equipment. Two methods—Market Value Comparison and Depreciated Replacement Cost—are recommended.
It also provides detailed accounting treatment for inter-ministry asset transfers, building improvements, and cash sweeps at year-end.
Inventory and Stock Counts
Entities must use the weighted average cost formula for inventory valuation and conduct physical stock counts on or near 31 December 2024. Where counts are conducted outside this date, specific reconciliation procedures are laid out to derive accurate year-end figures.
Rounding and Disclosure Practices
All financial statement figures should be rounded to the nearest ZWG. Disclosures must be clear, complete, and compliant with IPSAS—especially for material balances, donated right-of-use assets, and transactions involving the Consolidated Revenue Fund (CRF).
Final Thoughts
Treasury Circular No. 3 of 2025 offers comprehensive guidance for navigating the transitional phase to IPSAS compliance. It equips public sector entities with tools, templates, and procedures to ensure credible, comparable, and transparent financial reporting.
This transition is not just a compliance requirement—it’s an opportunity to strengthen trust, demonstrate fiscal discipline, and support evidence-based decision-making in Zimbabwe’s public sector.
Need Help?
If you’re a government entity or practitioner seeking support in interpreting or implementing the circular, feel free to reach out to us on the following details;
e-mail: marketing@ellchart.com, Call/WhatsApp on +263781 591 780
Ellchart Business School is a renowned institution dedicated to providing world-class training and capacity-building programs in financial management, accounting, and governance. As a key player in the implementation of International Public Sector Accounting Standards (IPSAS) in Zimbabwe, Ellchart Business School has been at the forefront of empowering public sector entities to adopt and effectively implement IPSAS.
Ellchart Business School delivers specialized solutions to enhance public sector financial management, comprising expert-led training programs, research initiatives, and advisory services. These comprehensive offerings provide authoritative guidance on IPSAS implementation, conversion, and sustainability, while also supporting the development of robust, IPSAS-compliant financial reporting frameworks and systems.
Let’s work together to build strong public financial systems that serve Zimbabwe’s development goals.
