Global Public Sector Shift to Accrual Accounting Steadies
The new International Public Sector Financial Accountability Index 2025 Status Report, published by the International Federation of Accountants (IFAC) and Chartered Institute of Public Finance and Accountancy (CIPFA) with support from the International Public Sector Accounting Standards Board (IPSASB), highlights steady, gradual progress in governments worldwide moving from cash to accrual-based financial reporting.
Accrual accounting provides governments with a clearer picture of their finances by recording the substance of transactions as they occur, rather than when cash transfers occur. This transparency helps inform decision-making and improves the ability to hold governments to account for their decisions.
Key findings of the report:
- By 2030, 56% of jurisdictions are projected to report on an accrual basis. This represents steady progress since the 2020 Index but at a slower pace than anticipated, reflecting the financial and operational strains governments faced during and after the pandemic.
- In 2024, high-income jurisdictions made up the majority of accrual adopters (57%), but by 2030, the landscape will shift. 60% of jurisdictions using accrual are projected to come from middle- and low-income economies.
- By 2030, 81% of accrual-reporting jurisdictions are expected to be applying International Public Sector Accounting Standards (IPSAS) either directly, with modifications, or as the foundation for national standards.
Lee White, Chief Executive Officer at IFAC said: "Accrual based reporting is essential for public sector transparency and accountability. 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.”
Owen Mapley, Chief Executive Officer at CIPFA said: “Strengthening public financial management through accrual reporting is fundamental to addressing today’s fiscal challenges and building sustainable futures. It is encouraging to see the shift from cash to accrual has continued despite the impact of the pandemic.”
Ian Carruthers, IPSASB Chair said: “The increasing usage and influence of the IPSAS Standards underlines the importance of the shift in IPSASB’s new 5 year strategy towards maintenance of the standards suite, in particular through the recent establishment of the IPSASB Application Group.”
About IFAC
IFAC, by connecting and uniting its members, makes the accountancy profession truly global.
IFAC member organizations are champions of integrity and professional quality, and proudly carry their membership as a badge of international recognition.
IFAC and its members work together to shape the future of the profession through learning, innovation, a collective voice, and commitment to the public interest.
About CIPFA
CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. Our 14,000 members work throughout the public services, in national audit agencies, in major accountancy firms, and in other bodies where public money needs to be effectively and efficiently managed.
About the IPSASB
The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards (IPSAS Standards), IPSASB Sustainability Reporting Standards (IPSASB SRS™ Standards) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS Standards and IPSASB SRS Standards and promotes the adoption and implementation of these to enhance the quality and consistency of practice throughout the world and strengthen the transparency and accountability of public sector finances and sustainable development. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, the government of Canada, and The World Bank. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC®). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.
New report captures current and future use of public financial reporting approaches by governments around the world