Accounting Standards

Move to accrual accounting set to continue, says IFAC

The international body forecasts 50% of jurisdictions globally will report on an accrual basis by 2025

A joint report by the International Federation of Accountants (IFAC) and the Chartered Institute of Public Finance and Accountancy (CIPFA) has forecast 50% of jurisdictions globally will report on an accrual basis by 2025.

The report was based on the International Public Sector Financial Accountability Index, which reports on the current and future use of public financial reporting bases and frameworks by governments globally.

Furthermore, the report found that Africa, Asia, Latin America and the Caribbean will lead to a projected increase in accrual adoption over the coming five years.

Rob Whiteman, the chief executive of CIPFA, said: “Accrual-based accounting is essential in helping governments mitigate corruption, improve trust and transparency, and deliver desired outcomes that their communities deserve and need in the post-pandemic world.”

Kevin Dancey, IFAC’s CEO, said: “This continuing shift from cash to accrual reporting in the public sector, and increased usage of IPSAS in particular, will be crucial to governments globally in making the tough choices they face following the pandemic.

“Professional accountants have a critical role to play in delivering the full potential benefits for citizens worldwide in terms of decision making, transparency, and accountability.”

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