Accrual Accounting On The Rise Among Governments Worldwide



The number of countries reporting their financial positions on an accrual basis is expected to increase from 37 to 98 by 2023, jumping from 25 percent to 65 percent, according to a new report.

The report, released Wednesday by the Association of Chartered Certified Accountants and the International Federation of Accountants, found that accrual accounting would provide greater financial transparency for citizens of these countries and includes 30 recommendations for implementing the accrual basis as opposed to cash basis accounting.

Cash accounting is used in some form by 75 percent of governments around the world, the report acknowledges, but argues it doesn’t provide the most accurate picture of a government’s fiscal health, nor allow it to adequately plan for the development, delivery and maintenance of the necessary services, programs and infrastructure on which citizens rely, thus leading to a breakdown of trust in government financial information.

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Source: Accounting Today

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