Globally, governments and the public sector are making slow but steady progress in adopting accrual-based accounting instead of cash-based accounting, according to a new report.
Fully 56% of governments worldwide are expected to have moved to accrual accounting by 2030, according to the new "
That is slower than was expected in the last index, in 2020, reflecting the impact of the COVID pandemic on government resources and priorities.
"Strengthening public financial management through accrual reporting is fundamental to addressing today's fiscal challenges and building sustainable futures," CIPFA CEO Owen Mapley said, in a statement. "It is encouraging to see the shift from cash to accrual has continued despite the impact of the pandemic."
With the pandemic largely in the past, the 2025 index expects changes in which governments are adopting accrual-based accounting. As of 2024, the majority of adopters (57%) were high-income jurisdictions, but the reports predicts that by 2030, 60% of those using accrual will be middle- and low-income countries.
What's more, the index expects that the overwhelming majority of accrual-reporting jurisdictions will be applying International Public Sector Accounting Standards in some form.
"Accrual based reporting is essential for public sector transparency and accountability," IFAC CEO Lee White said, in a statement. "It is also the foundation for the use of global IPSAS Standards. Our members fulfil a vital role in advising and supporting governments in their journey with the use of accrual accounting and global standards delivering clear accountability."
"The increasing usage and influence of the IPSAS Standards underlines the importance of the shift in IPSASB's new five-year strategy towards maintenance of the standards suite, in particular through the recent establishment of the
