50% of governments to report on accrual basis by 2025, says CIPFA

By 2025, governments in 50% of jurisdictions will report on an accrual basis, according to the latest report by the International Federation of Accountants (IFAC) and the Chartered Institute of Public Finance and Accountancy (CIPFA).

The report was drawn from the IFAC Index, which captures current and future use of public financial reporting bases and frameworks by governments around the world.

The index found that while 30% of governments report on an accrual basis in 2020 (an increase of 6% since 2018), 50% will report on accrual by the end of 2025, this includes countries from Africa, Asia, and Latin America and the Caribbean.

Rob Whiteman, 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, CEO, added: “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.”