Accrual Report

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BENEFITS OF
ACCRUAL ACCOUNTING
IN THE PUBLIC SECTOR
TABLE OF CONTENTS
Acronyms and abbreviations 3
Acknowledgements 4
Preface 5
Executive Summary 6
1. INTRODUCTION - WHAT IS ACCRUAL ACCOUNTING? 7
2. ACCRUAL ACCOUNTING AND FINANCIAL MANAGEMENT REFORMS 11
3. BENEFITS OF ACCRUAL ACCOUNTING - FOR WHAT AND FOR WHOM? 13
3.1. Analysis of the Benefits in Practice: Literature Review 16
3.2. Analysis of the Benefits in Practice: Country Examples 19
Example 1. School infrastructure information for decision-making 21
Example 2. Registration and follow up of grants provided for specific purpose 21
Example 3. Accrued liabilities for long term loans for accountability and planning purposes 22
Example 4. Impairment of receivables to reflect recoverable amount 22
4. THE AMBIVALENT ROLE OF TRANSPARENCY 23
5. ENABLING CONDITIONS FOR ACCRUAL ACCOUNTING IMPLEMENTATION 26
6. THE COSTS OF ACCRUAL ACCOUNTING IMPLEMENTATION 30
6.1. Types of Cost 31
6.2. Additional costs that relate to accrual accounting 32
6.3. Reallocation of resources 32
6.4. Cost savings due to benefits from better decision-making 34
7. CONCLUSIONS 35
1 Table of Contents
Annex 1. Country Cases: Accrual Accounting Implementation 37
Accrual Accounting in Cyprus 37
Accrual Accounting in Greece 38
Accrual Accounting in Portugal 38
Accrual Accounting in France 39
Accrual Accounting in United Kingdom 39
Annex 2. Enabling Pillars of Accrual Accounting Implementation 41
Goal Setting and Processes 41
Political support and ownership 41
Implementation plan 41
Accrual information integrated in decision-making and performance management 42
Human capital 43
Training and Educating Public Sector Accountants 43
Human Capacity 43
Expert Support 43
Technical 43
IT Financial Management Systems 43
Chart of Accounts 44
Accounting Standards and Policies 44
Annex 3. List of References 45
Table of Contents 2
ACRONYMS AND
ABBREVIATIONS
CIPFA Chartered Institute of Public Finance and Accountancy
EFSF European Financial Stability Facility
EPSAS European Public Sector Accounting Standards
ESA European System of Accounts
EU European Union
GFSM Government Finance Statistics Manual
IFAC International Federation of Accountants
IFRS International Financial Reporting Standards
IPSAS International Public Sector Accounting Standards
IPSASB International Public Sector Accounting Standards Board
IT Information Technology
NPM New Public Management
OECD Organisation for Economic Co-operation and Development
PEFA Public Expenditure and Financial Accountability
PFM Public Financial Management
PULSAR Public Sector Accounting and Reporting Program
3 Acronyms and Abbreviations

ACKNOWLEDGEMENTS
This knowledge paper focuses on the benefits and Ian Carruthers, Chair of the International Public Sector
value added of accrual accounting in the public sector Accounting Standards Board and Chair of Standards,
as compared to cash based accounting and reporting. Chartered Institute of Public Finance and Accountancy.
It is an output of the World Bank’s Governance Global
Practice and has been developed by PULSAR, the Public Marios Hadjidamianou (Cyprus), Chartered Accountant
Sector Accounting and Reporting Program. at the Treasury of the Republic of Cyprus.
The authors, Eugenio Caperchione, Sandra Cohen, Dimitrios Paliouras (Greece), Acting Head of Division of
Francesca Manes Rossi, and Isabel Brusca, led by Accounting for General Government, Ministry of Finance,
Iwona Warzecha, seek to identify the main implications General Accounting Office.
of accrual accounting in public financial management.
Bernhard Schatz (Austria), Member of the International
The paper considers the benefits of accrual accounting
Public Sector Accounting Standards Board and Senior
from different approaches: theoretical analysis and a
Manager, PricewaterhouseCoopers.
literature review offer a global perspective of the benefits
for different users and different purposes and interviews
Luis Viana (Portugal), Member of the Reform Team in the
with country experts and with prominent members of
Portuguese Ministry of Finance at the time of the reform
the accounting profession provide evidence of how
and now Counselor in the Court of Auditors (Tribunal
accrual accounting has been implemented and of its
de Contas). He is also member of the Portuguese Public
benefits in practice, as well the enablers and challenges
Finance Council.
of implementation.
Their contributions were fundamental to including
The authors would like to thank the following experts
examples of how accrual accounting can improve
who kindly agreed to be interviewed and provided
financial management in practice and to corroborate
valuable contributions based on their experiences with
reflections on enablers and obstacles to the success of
accrual accounting:
financial management reform. We are very grateful for
their participation.
Marie-Pierre Calmel (France), General Secretary of the
Public Sector Accounting Standards Council (Conseil de
Normalisation des Comptes Publics).
Acknowledgements 4
PREFACE
The Public Sector Accounting and Reporting Program countries help shape the program through regional
(PULSAR), launched in 2017, is a regional and country cooperation platforms and input to two Communities
level program in 13 beneficiary countries of Europe and of Practice, on financial reporting frameworks and on
Central Asia. Its objective is to support the enhancement education.
of public sector accounting and financial reporting
frameworks in line with international standards and More information about the PULSAR program and its
good practices to improve government accountability, publications is available online at:
transparency, and performance.
www.pulsarprogram.org
The objectives and scope of the PULSAR Program are
jointly determined by the PULSAR Partners - Austria,
Switzerland, and the World Bank – which provide
institutional support for its implementation and mobilize
the resources needed for its activities. Beneficiary
5 Preface
EXECUTIVE SUMMARY
This report focuses on the application of accrual The report considers the "enablers" needed for the
accounting in public sector entities. The objective of the successful introduction of accrual accounting, identified
study is to illustrate benefits – but also costs – related to in three intertwined pillars: goal setting and processes,
the implementation of this accounting system. human capital, and technical. Interactions among these
enablers is discussed, underlining that the combination
Cash accounting, still widely used by the public sectors of different enablers is essential to achieve the expected
in PULSAR countries, is based on the recognition of cash benefits.
inflows and cash outflows. Expenses and revenues are
recognized when the payment is made or received. Although accrual accounting brings many benefits hard
Accrual accounting also records cash transactions to measure, its implementation can initially be a costly
but additionally recognizes the effects of transactions reform in three main dimensions: time (overall and
and other economic events when they occur. As a annual costs), flows (budget flows and accrued costs), and
result, accrual accounting statements provide a more financial sources (government funds or other sources).
comprehensive view of the financial performance and While these initial costs can be significant, depending
position of an entity, with information that could not be on the requirement for new or upgraded IT financial
tracked under cash accounting. management systems and reskilling or hiring personnel,
these should reduce over time and should be seen
The benefits of accrual accounting for both internal against the long-term outcome of sounder management
and external users in terms of decision-making and of resources and financial benefits of reductions in the
accountability are discussed. The report draws on cost of delivering services and performing public sector
analysis of the available literature and from the reform activities.
experiences of Cyprus, France, Greece, Portugal and
United Kingdom to offer important suggestions and The report makes clear that the reform of the accounting
lessons learned for reform in the PULSAR countries. system needs to be placed in a context of broader
Interviews with experts who have actively participated modernization of public financial management (PFM)
in the adoption of accrual based accounting provided systems, aimed at increasing accountability and
valuable insight into both the perceived benefits of the performance of public management. Investments in
reform and the difficulties and resistances experienced human resources, information technology (IT) systems,
in the change. The report highlights that each country and above all high-level political support for the whole
can have a different accounting maturity level; indeed, process are key resources in order to produce a stable
within the same country different public entities may change. The compilation of high-quality, reliable
operate different accounting systems, depending on the information under accrual accounting is not an end
stage of reforms already adopted. in itself. The full potential benefits of the reform can
only be realized if this information is concretely used
Transparency is seen as an important advantage related by politicians and managers in the decision-making
to the adoption of accrual-based accounting systems. process, and made widely available to the public and
However, in order for this advantage to materialize, other stakeholders to improve transparency and
stakeholders have to gain easy access to reliable accountability.
accounting information disclosed in an understandable
language and widely accessible.
Executive Summary 6
1
INTRODUCTION - WHAT IS
ACCRUAL ACCOUNTING?
The discipline of accounting can be dated back to the
ancient Mesopotamia. Through the centuries it has
evolved, in parallel with human progress, in order to
provide suitable means to register, report, and keep
track of economic transactions. Contemporary accrual
accounting has grown out of the financial needs of the
commercial world in 15th century Italy, which gave birth
to double entry bookkeeping.
Accounting can be defined as a process of recording,

analyzing, and reporting in monetary terms the financial
transactions of an entity to both internal and external
stakeholders. It has acquired a growing relevance in the
last couple of centuries, as money acquired its main
role as a medium of exchange and, consequently, as
a measure of wealth. Accounting bases, and related
principles and rules, have been created to satisfy
both accountability and stewardship in any kind of
organization.1
1 Jones and Pendlebury 2000.

While accrual accounting and comprehensive accounting the application of accrual accounting does not remove
standards, such as International Financial Reporting the requirement to present information about cash-
Standards (IFRS), became increasingly used (often legally related transactions, but enriches it with accrual-based
required) by private corporations, accounting in the information that makes visible non-cash transactions
public sector until very recently relied almost entirely and economic events spread over time, which could not
on cash accounting. be tracked under cash accounting.
Cash accounting is based on the recognition of cash In the last few decades, under the New Public
inflows and cash outflows; therefore, expenses and Management (NPM) wave,2 and with the encouragement
revenues are recognized when the payment is made of international organizations (e.g. the International
or received. The main advantages are that it is simple Monetary Fund; the Organisation for Economic Co-
and easy to apply, understand, and verify. These operation and Development [OECD]; and the World
features allow politicians, managers, citizens, and Bank) as well as standard setters and professional
any stakeholder without a specialized background in accountancy organizations (the International Public
accounting to understand accounting or budgetary Sector Accounting Standards Board [IPSASB] and the
reports. Cash accounting can be both suitable and Chartered Institute of Public Finance and Accountancy
sufficient in circumstances when cash transactions [CIPFA]), accrual accounting has been progressively
prevail, i.e. goods and services are purchased and introduced in different countries and applied in multiple
immediately consumed with no other significant non- public entities, especially for reporting purposes.3
cash transactions or economic events occurring (e.g.
creation of assets). However, most public sector entities The main reasons for the move from cash to accrual
execute complex transactions, incur debt, commit to accounting basis can be identified in the additional
various liabilities or other public service obligations, and information that accrual data makes available, together
own and manage large-scale assets. This requires more with accounting processes that are supporting financial
complex accounting bases and principles to enable the and operational performance of public sector entities.
preparation of financial reports that faithfully represent In fact, accrual accounting makes it possible to better
and quantify in monetary terms these economic determine a government's financial situation, since it
phenomena. covers not only outflows and inflows during the year,
but also assets, payables, and receivables. Furthermore,
Using cash accounting, it is not possible to assess the it allows consideration of long-term liabilities, as well
value of assets and liabilities over time because it records as provisions that need to be created to cover risks
nothing but cash. Furthermore, cash accounting does not and expenses deriving from operations during the
account for the costs consumed and revenues earned year. Assets, both tangible and intangible, can be
over a given period (regardless of the existence of cash better valued as accrual accounting principles make it
flows), and consequently it is not fully appropriate for necessary to consider amortization and depreciation,
assessing the overall income created by an entity. as well as provisions related to future maintenance
costs. Complete accrual accounting processes also
Under accrual accounting, the effects of transactions have to identify and assess risks to disclose contingent
and other events are recognized when they occur liabilities relating to future events and commitments
(and not only as cash, or its equivalent, is received – this in turn can support active risk management to
or paid) and they are recorded in the accounting avoid or minimize potential future outflow of resources.
records and reported in the financial statements of Furthermore, financial assets (such as receivables or
the period to which they relate. Accrual accounting investments to other entities) can be valued at the end
also records cash transactions, which are presented of the year taking into account their value in the market.
in the cash flow statement. As a result, accrual Because of this greater precision in identifying assets and
accounting statements allow a holistic view of the liabilities, accrual accounting better identifies net assets
financial performance and position of an entity. Thus, and trends in time.
2 According to Pollitt and Bouckaert (2011, p. 10), the NPM is a “doctrine that the public sector can be improved by the importation of
business concepts, techniques, and values”. See Caperchione 2006 for an analysis of the consequences of NPM on finance practitioners.
3 An analysis of the European and worldwide situation is provided by Brusca et al. 2015; Christiaens et al. 2015; International Federation
of Accountants (IFAC)-CIPFA 2021.
1. Introduction - What is Accrual Accounting? 8

Costs and revenues are assigned to the relevant financial reasonable judgments and accounting estimations
year in accordance with their occurrence, rather than (e.g. in the case of depreciation), and choose among
with the related cash flow. This kind of recognition is able different measurement methods and evaluation criteria,
to quantify not only the amount of resources consumed thus creating room for discretion, error, and even
by an entity in a given year but also to determine the manipulation. Other staff may require knowledge of new
full cost of services produced, and provides detailed systems and processes, and training, so as to understand
figures in the management accounting system. In doing and interpret the much richer data provided through
so, accrual accounting ensures relevant information accrual accounting.
is available, enabling managers and politicians to take
informed decisions (e.g. make-or-buy, setting up fees This report seeks to illustrate the benefits – and the costs
for services, etc.). Furthermore, on the revenues side, – related to the implementation of accrual accounting in
accrual accounting also includes revenues that come public sector entities, including for internal and external
with service obligations (e.g. subsidies subject to specific users in terms of decision-making, accountability, and
restrictions) or that are not related to cash flows (e.g. transparency. It points to the enabling conditions needed
increase in the value of investments). In addition, a more for successful introduction of accrual accounting (section
precise assessment of the overall performance of public 5 and Annex 2), as well as to the related costs (section 6).
sector entities can support a better consideration of
The paper is focused on general accrual accounting
intergenerational equity.4
concepts and principles, rather than on a specific set
Undoubtedly, there are also some drawbacks related of standards, as each country can set its own national
to the adoption of accrual accounting. It requires principles. However, the International Public Sector
specific greater knowledge of accounting principles Accounting Standards (IPSAS) are used as a common
and standards, either national or international. The reference point, which many countries choose to adopt
complexity of accrual accounting requires core staff directly or use as a basis to develop national standards.5
to determine adequate accounting policies, make
Table 1. Main Features of Accrual vs. Cash Basis Accounting
Accrual basis Cash basis
Principles and National or international accounting principles Cash based standards for the
standards and standards. registry of inflows and outflows.
All economic transactions including complex

Types of Only the cash component of the
non-cash transactions and other economic
transactions transactions, with no deferred
phenomena such as deferred payments or
reflected by payments or consumption,
delivery of agreed obligations, creation and
accounting basis assets or liabilities.
consumption of resources, etc.
More complex (requires specific relevant

Application Simpler.
knowledge, education, standards, IT systems).
4 Intergenerational equity is a principle of fairness amongst all generations in the use and conservation of both monetary and natural
resources. For a detailed discussion on the implementation of accrual accounting in public sector organizations, see Burth and Hilgers
2014; Cavanagh et al. 2016; Christofzik 2019; Metcalfe and Sanderson 2020.
5 See IFAC-CIPFA 2021.
9 1. Introduction - What is Accrual Accounting?

Accrual basis Cash basis
Requires understanding of specific principles and Easier as it involves only cash

Understandability
key standards applied. transactions.
Improved when the same set of accounting

Comparability standards are applied and quality of financial High for basic elements.
reports is achieved.
Reported when they are

Revenues Reported when they are earned.
received in cash.
Reported when resources are used or when they

Expenses Reported when cash is paid.
match revenues.
Limited to cash flows related to

Cost of services Can be calculated for each product/process.
each service.
Receivables Reported as assets. Not reported.
Payables Reported as liabilities when they are incurred. Not reported.
Valued at their acquisition cost minus

Not reported - accounted
amortization, depreciation, and impairment, or
Assets when cash is paid as a form of
at their current value at the end of the reporting
expense.
period.
Reported also considering possible future events

Liabilities Not reported.
(e.g. provisions).
Identified as difference between total assets and

Net assets Not reported.
total liabilities.
Cannot be estimated - only

Result based on revenues earned and expenses
Surplus or deficit the difference between cash
occurred in the financial year.
balances, inflows, and outflows.
Statement of financial position - balance sheet;

statement of financial performance - income
Financial Reports Budget execution report.
statement; statement of changes in net assets;
cash flow statement; notes and disclosures.
1. Introduction - What is Accrual Accounting? 10

2
ACCRUAL ACCOUNTING AND
FINANCIAL MANAGEMENT
REFORMS
Public sector accounting reforms are usually
embedded in broader modernization of public
financial management, aimed at increasing
accountability and performance of public
management (Pollitt and Bouckaert 2011). The
implementation of accrual accounting as part of these
reforms produces financial reporting that can be made
publicly available and used to improve decision-making
(internal use) and accountability (external use). Accrual
accounting is required in the framework of modern
public financial management models, assuming that
the information can support the objectives of the new
models (Carlin 2005).
The literature shows evidence of important differences × Re-education and training of professionals, both
among countries in the level of success and achievements preparers of financial statements and users, especially
of NPM reforms in general, and of accrual accounting in managers, policy-makers, macroeconomists,
particular, which are justified by differences within the fiscal statisticians, and other stakeholders, making
administrative, cultural, and political contexts (Pollitt and them aware of the benefits of accrual data for
Bouckaert 2011). The introduction of accrual accounting decision-making. This requires a cultural change
through different routes can impact its benefits (Pollitt in the organization, so that financial information is
and Bouckaert 2011). There is consensus in the literature embedded in decision-making processes (Hepworth
that successful implementation requires the completion 2003). The support of managers and politicians
of a number of phases that progressively move forward becomes essential in the process of change.
and scale up the reforms in order to achieve overall
× Changes in the administrative and legal framework,
objectives and make their benefits evident (Cavanagh
so that the focus for decision-making and for
et al. 2017).
accountability is on accrual information. This is a
problem for some administrations, which use cash
Accrual accounting is a tool to achieve the aims of
accounting for the budget and accrual accounting
the reforms but not an end in itself. To be successful,
for financial statements. If cash accounting remains
it needs to be part of a wider project including:
central for legal control and monitoring of entities
× Clear definition of the objectives of the reform and then managers and politicians, more worried by the
a framework to redesign operational activities and legal issues than by the content and potential value
organization, enhance monitoring systems, and of accrual data, do not take full account of accrual
reform IT systems so as to change the processes and accounting information.
flow of information (for example asset inventories
are important) (Metcalfe and Sanderson 2020; The
All the above are discussed in more detail in Section 5.
World Bank PULSAR 2020a).
× An implementation plan and a guide for the transition.

Since the introduction of accrual accounting requires
time, gradual improvements in the quality, timeliness,
and relevance of financial information can be sought
(The World Bank PULSAR 2021a). The use of pilot
entities can also be good practice (Jorge et al. 2021).
2. Accrual Accounting and Financial Management Reforms 12

3
BENEFITS OF ACCRUAL
ACCOUNTING - FOR WHAT AND
FOR WHOM?
The increasing adoption of accrual accounting is
evident both in the literature and in practice. This
section will consider the benefits of accrual accounting
implementation, focusing on the achievement of broader
financial management objectives that expand beyond
the preparation of accrual based financial statements
and the availability of accrual accounting information.
There is consensus in accounting literature and by

conceptual accounting frameworks that accounting
information in the public sector should be focused on
two purposes:
× accountability to stakeholders and
× supporting decision-making (van Helden and

Reichard 2019).
"
From a normative perspective, the focus is on the users
and use of the information. The IPSASB Conceptual
Framework (2014) defines the objectives of financial
reporting at the core of their structure, making clear Although the IPSASB Conceptual
that the information is not an end in itself. This is in fact Framework puts transparency
one of the problems in practice. Too often the focus is for citizens at the core of the
put on obtaining the information rather than how it is
then used, considering it as the final aim of the process
financial reporting, the full
rather than only the first step. financial statements can be
difficult to understand for non-
accounting experts.
"
— Ian Carruthers
Accrual accounting per se will
not solve the financial issues,
it will rather highlight them.
Benefits from transitioning to In accordance with the IPSASB (2014, 13), “the objectives
of financial reporting by public sector entities are to provide
accruals will be substantiated information about the entity that is useful to users for
only when the financial problems accountability purposes and for decision-making purposes”.
are understood and actions are This requires the definition of users of financial reporting.
The Conceptual Framework summarizes stakeholders as
taken to address them.
“service recipients and resource providers”, that is mainly
an external users’ perspective, justified by the public
— Marios Hadjidamianou availability of financial reporting. It refers to citizens
as the "primary users", while also considering other
users, such as donor agencies, lenders, or international
organizations. The potential interest of other non-
primary users are recognized: regulatory and oversight
bodies, macroeconomic statistics compilers and users,
audit institutions, subcommittees of the legislature or
other governing bodies, central agencies and budget
controllers, entity management, rating agencies, and, in
some cases, lending institutions. Despite this focus on
external users, the Conceptual Framework does recognize
internal users, such as managers and politicians, who are
key decision makers, as potential users. Figures 1 and
2 summarize the benefits of accrual accounting for the
potential users based on this differentiation between
internal and external users.
3. Benefits of Accrual Accounting - For What and For Whom? 14

Figure 1. Benefits of Accrual Accounting for External Users
DECISION MAKING ACCOUNTABILITY
Decisions about the use of Informs on the use of resources

services
Informs about performance
Electoral decisions EXTERNAL USERS management
Granting of financial aid Accounts for fiscal and financial

Citizens and their representatives sustainability
Lending financial resources
NGOs
Facilitates public scrutiny
Contracting out, outsourcing
Donor agencies
Provides fiscal credibility
Public-private partnerships Lenders and creditors
Informs about cost of services and
Monitoring the application of Rating agencies
creates responsibility
legislation and budget rules International organizations
Informs electoral decisions
Monitoring financial and fiscal Regulatory and oversight bodies
sustainability Audit institutions Reduces corruption
Subcommittees of the legislature

Budget controllers
Figure 2. Benefits of Accrual Accounting for Internal Users
DECISION MAKING ACCOUNTABILITY
Facilitates analysis and a focus on Accounts for responsibilities within

performance and achieving value for the hierarchy in the organizations
money decision-making INTERNAL USERS (e.g. managers towards political
supervisors)
Drives efficiency of public resources
Accountants Discharges financial responsibilities
Provides information for budgeting and
planning process Internal Control / Provides credible data to fiscal
Internal Audit statistics
Supports fiscal decision
Managers Supports anti-corruption tools
Financial sustainability decision making
Governing bodies Accountability of performance
Managing debt and liabilities and
management
identifying fiscal risk Politicians
Reducing fiscal illusions and improving Fiscal statisticians
incentives
Macroeconomists
Supporting long-term thinking and
decision making
Sound management of assets
Intergenerational equity decisions
15 3. Benefits of Accrual Accounting - For What and For Whom?

3.1 Analysis of the Benefits in
Practice: Literature Review
"
Table 2 summarizes the literature reviewed, which
points to generally positive findings. The benefits are
differentiated between the two main objectives of
financial reporting: accountability and decision-making. The benefits of accrual
accounting come with the use.
There is, though, debate in the literature about the
benefits and achievements of accrual accounting in
practice, especially in trying to identify who is using the
— Bernhard Schatz
information and the level of usefulness (van Helden and
Reichard 2019).
Results about the use of accrual accounting information

Most empirical studies focus on internal users, as they
can be diverse and contradictory, with differences
are considered to have more knowledge of financial
between countries. While much of the research
reporting, but they are sometimes asked about
supports its benefits and advantages, others challenge
the external users, mainly from an accountability
the suitability of accrual accounting systems used in
perspective. As there has been less study of external
the private sector for the public sector. Conclusions
users, only a limited number of papers refer to the
and findings can also be affected by the timing of the
external perspective.
research. Some of the more negative views include that
the information is complex, not understood by some
users, not relevant for budgetary reporting, and that it is
"
not used in development debates. It is interesting to note
however, a tendency towards a more precise perception
of the benefits of accrual accounting over time, once the
Simplified information available reform has advanced and users have acquired some
for citizens is needed. It is experience (Jagalla et al. 2011).
important both to inform voters

and for legitimacy purposes.
Citizens need to understand who
the best political candidate is
to manage financial resources,
ensure better services, and
achieve financial sustainability.
— Luis Viana

Table 2. Benefits of Accrual Accounting Identified from the Literature Review
Country / Method of
Users Benefits for Benefits for
level of analysis /
analyzed decision-making accountability
government author
Australia - Survey - Government Assessing department and Discharging

federal, state Kober et al. officials program performance. accountability
and territory (2010) responsible obligations.
Managing assets &
governments for accounting
liabilities. Informing of cost
and budgeting
of goods and
(external users). Resource allocation
services.
decisions.
Chief financial
officers Asset acquisition
(preparers). decisions.
Managers (internal Determining costs for

users). goods/services.
German federal Interviews - Accounting Improved cost Increased cost

states Jagalla et al. officers, managers, management. transparency.
(2011) politicians, and
Assets and debt Accountability
auditors.
management. of assets
and liabilities
Mindset changes (Focus on
management.
results).
Romania - Study of General Provides information Provides essential

public sector accrual assessment of about assets, liabilities, information
administrations information implications. cost and revenues, useful about assets,
produced - for management. liabilities, cost and
Deaconu et revenues, useful
al. (2011) for accountability
purposes.
Greek Survey - Financial Provides information Provides

municipalities Cohen et al. department to rationalize the information
(2013) officers. organization’s actions. for resource
allocations
Enhances efficiency
accountability
measurement.
and legitimizes
the organization’s
actions.
German cities Survey - Financial Increased Increased

and counties Burth and managers intergenerational equity. transparency.
Hilgers (2014) (treasurers).
Increased management
capabilities.

Country / Method of
level of analysis /
government author
New Zealand Survey - Chief executives, Useful information for

- public Laswad and chief financial planning and forecasting,
administrations Redmayne officers, and other analyzing trends and
from several (2015) finance staff. budgets, and to formulate
sub-sectors fiscal policies.
German local Analysis of General Increased efficiency.

governments cost efficiency assessment of
- Lampe et al. implications.
(2015)
Swiss cantons Semi- Accounting Useful information for Use of information

structured advisors and fiscal policy decisions. in fiscal policy
interviews treasury officials. debates.
Debt management.
- Fuchs et al.
Credit Rating
(2017) Financial sustainability
Agency (Moody’s).
management.
Assets and resources

management and
planning.
34 OECD Survey - Experts and Design of new procedures Enhanced

countries - OECD/IFAC ministries of and IT systems that accountability
public sector (2017) finance of make easier control and and increased
administrations countries. monitoring of operations. transparency.
9 countries - Roundtable International Achieving value for Transparency

public sector discussions experts in public money and financially and facilitating
administrations and semi- sector accounting. sustainable decision- public scrutiny,
structured making, managing assets fiscal credibility,
interviews - well and accounting reducing
Metcalfe and for the maintenance fiscal illusions
Sanderson backlog, managing and perverse
(2020) liabilities and identifying incentives.
fiscal risks, supporting
long-term thinking,
embedding performance
management, improving
medium-term forecasting
and planning, supporting
effective project
management across
government.

Country / Method of
level of analysis /
government author
Portugal - local Survey - Chief financial Planning and management To inform

government Gomes et al. officers. control. stakeholders of the
(2021) use of resources.
Measure and evaluate
performance and strategic
decisions.
Spain - central, Survey - Chief financial Planning and management Reporting about
state and local Brusca et al. officers and control. management to
government (2021) auditors. stakeholders.
Measurement and
evaluation of performance. Accountability of
fiscal discipline.
Netherlands Media Key actors for Use of information

and Italy - reports, development of by financial
two projects minutes of the projects. creditors to
developed meetings, support the project
by public interviews - or not.
administration van Helden et
Use of information
in each case al. (2021)
to justify the
projects.
Malaysian Survey – Malaysian federal Assist in managing

federal Ismail (2022) government departments’ assets
government accountants. and liabilities, to assess
the cash flow needs of
a department, and for
departmental resource
allocation decisions.
"
3.2 Analysis of the Benefits in
Practice: Country Examples Learn the lessons from others,
both what worked and what
For a willing reformer it can be beneficial to take on board
the experiences of other countries, especially those with didn’t.
a similar size, administrative system, or accounting
tradition, to better understand their successes and — Ian Carruthers
better prepare for possible challenges.

For this paper, public officials from Cyprus, Greece, many benefits. These are not to be taken for granted,
France, and Portugal and sponsors of accrual accounting though, as they require work and dedication by many of
were interviewed on the benefits of accrual accounting. the involved parties. Importantly, all interviewees agreed
These countries were selected as they are comparable in that the actual use of the accrual data is fundamental,
size with PULSAR beneficiaries, and all have adopted or in order to have concrete benefits.
are in the process of adopting accrual accounting. France
introduced accrual accounting in public sector entities Box 1 provides a summary of the benefits gathered
from 1962 and Portugal in 1997. Greece and Cyprus through the interviews.
are in transition to accrual accounting for the central
The examples on the following pages highlight the
government. The common message from these countries
tangible benefits of transitioning to accrual accounting.
seems to be that reform is possible and that it can offer
BOX 1
×
Practical Insights: Benefits of Accrual Accounting
Accrual accounting can bring accurate, reliable, change, and public private partnerships are
timely, and complete information on assets recognized or disclosed with accrual accounting.
and liabilities in the public sector. Non-cash Impairment of financial assets (e.g. receivables),
transactions are recorded and recognized for and assessment of the cost of financial strategies
the first time. with the use of financial instruments, become
evident.
× Accrual is an enabler for improvements in
financial management permitting disciplined × Accruals promote intergenerational equity, as
management and rigorous follow-up, as well as they allow better understanding of how the public
accountability. sector should be organized. For example, loans
for the creation of assets should not be extended
× Accrual fosters better allocation and use of public
beyond the life of the assets themselves.
resources, especially long-term assets for better
service provision and overall improved asset × Accrual accounting provides better information
management. on costs.
× Accrual accounting improves reporting, as there × IT facilitates the production of more reliable
are checks and balances. national accounting data also for the purpose
of fiscal statistics. Accruals make it easier
× Thanks to accrual accounting, supervising and
to communicate improvements in the
oversight authorities will have better information
administration of financial affairs in the Eurostat
to perform more effective and targeted control
and the European Union (EU), and to be compliant
and audit.
with EU regulations and fiscal rules.
× Accrual allows foreseeing long-term effects
connected to plans, activities, and the anticipation
× Accrual accounting benefits are different for
different users. The emphasis put on the
of risks; presenting the economic substance of
information disclosed in the statements depends
the transactions, as well as the effects of different
on their role and the responsibilities of the user,
options, and inducing politicians to reflect on
types of information sought, as well as on the
them.
circumstances (e.g. COVID-19, financial crisis).
× Risks coming from financial instruments, So, the benefits depend on the perspective of
contingent liabilities, foreign currency, climate the user.

Example 1.
Cyprus
Marios Hadjidamianou
School infrastructure information for decision-making

Part of the procedures undertaken to make the a. Identifying maintenance needs (current and
transition to accruals accounting was to identify, projected) of the buildings.
register, and measure the value of all public buildings,
b. Improving projections of the equipment needed in
including offices, schools, and other public buildings.
each school.
The Ministry of Education has been able to scrap the
old and incomplete registers it used for the school c. More efficient use of areas within schools, not being
infrastructure and put in place the new one developed fully utilized.
under the accruals accounting transition. The new fixed d. More efficient allocation of students to different
assets register is an electronic one, which includes exact schools that might be over or under loaded.
location, full specifications, year of construction, size,
e. Better use of school buildings, especially those with
even photos of the assets involved. The Ministry is hoping
only a few students in rural areas. It has already been
to use the new Register in their everyday management
examined whether some buildings can be used as
of the schools, including:
museums, or local authority’s offices, or even as
cultural centers.
Example 2.
Cyprus
Marios Hadjidamianou
Registration and follow up of grants provided for specific purpose

Under the new accounting policy adopted on grants, records on whether government’s policies are actually
if the government provides a grant to an entity or an implemented through these grants; otherwise, the
individual for a specific purpose, we keep these entities government will ask the money back from the entities or
or individuals under our “Receivables” in the Balance individuals failing to fulfil their performance obligations.
Sheet, until they fulfil their performance obligation, i.e. Thus, we make sure that there is an appropriate and
we verify that they spend the money for the purpose it effective way of using public resources (in this case the
was provided. In this way, we keep real time accounting grants), in accordance with the government’s policies.

Example 3.
Greece
Dimitrios Paliouras
Accrued liabilities for long term loans for accountability and planning purposes
Under the Master Financial Assistance Facility agreement purposes. If we didn’t have accounting in accrual basis
(2012) between the European Financial Stability Facility we wouldn’t have any information about this liability and
(EFSF) and the Hellenic Republic as beneficiary Member suddenly at the end of the life of the financial instrument
State, that was part of the second package of financial we would face a liability and probably our plans would
assistance for Greece, EFSF disbursed 10-year loan be derailed.
tranches to Greece. The majority of these loan tranches
had interest, which was due at the end of the repayment
of the loan tranches. Through the accrual accounting we Note: The EFSF was created as a temporary crisis resolution
were recognizing our accumulative liability every year mechanism by the euro area Member States in June 2010.
(accumulative interest would be differed and paid with The EFSF provided financial assistance to Ireland, Portugal,
the amortization at the end of the loans), helping us in and Greece. This task was subsequently performed solely
accurate reporting and supporting us for accountability by the European Stability Mechanism.
Example 4.
Greece
Dimitrios Paliouras
Impairment of receivables to reflect recoverable amount

Receivables of nominal value of €105 billion had to be policy was applied so as the impairment for these claims
measured at the recoverable amount, i.e. the amount to be calculated on the basis of the floating average of
that is reasonably expected to be collected, for financial the collection rates of the last five reporting periods.
reporting purposes under accrual accounting. At the The result of applying this policy was a huge amount
reporting date, impairment was calculated on the of impairment, €101 billion. Thus, accrual accounting
accounts receivable, so that they would be adjusted principles helped to disclose the true and fair value of
to the amount that would be reasonably expected to receivables in our financial reports.
be collected. To assess the recoverable amount, a new

4
THE AMBIVALENT ROLE OF
TRANSPARENCY
Changes in our society, and the increasing role
assigned to citizens as co-producers of public
services,6 call for new accountability requirements.
The public expect more transparent (and open)
government. Citizens are stakeholders, interested
in understanding ‘where money goes’ and whether
promises made by politicians have been maintained.
Public sector entities need to provide accessible financial
and non-financial information on how public resources
have been used and what results have been achieved,
above all in terms of improvement in quantity and
quality of public services. The use of information and
communication technologies can support public entities
in satisfying these information needs, in line with public
6 Citizens can be considered co-producers of public services

when they provide in-depth and systematic suggestions in the
creation and management of public services.
financial management pillars.7 To this end, it is important amongst various users of accrual financial information.
to identify ‘how’ information should be disclosed and
‘how much’ information should be provided. Each entity has to find the right trade-off between
transparency and the cost of providing information,
Increased accountability and transparency are as well as a balance between releasing useful
considered among the main advantages of adopting information and causing an information overload.
accrual accounting based systems. They calculate the The selection of information requires taking into
costs of delivering government programs and services account the different needs of internal and external
more precisely, and allow citizens and other external stakeholders. The aim is to provide sound information
stakeholder to assess whether efficiency requirements and avoid information overload which might have
have been achieved and whether the entity can meet its some counterproductive effects, e.g. to focus on non-
short- and long-term financial obligations. Of course, in relevant data, or include too much internal and technical
order to serve the accountability function, financial data information that may discourage further reading. This
have to be reliable and provided in an orderly and clear dilemma however is not public sector specific. The private
manner. Possible issues to be aware of with greater sector faces similar challenges to reduce excessive
transparency include that it may encourage opportunistic and irrelevant boilerplate financial information and
behavior by managers and politicians: for instance, disclosures, which distract users from understanding
managers can selectively use or manage performance significant and value relevant accounting information.
indicators to claim higher salaries and bonuses or
obtain larger budgets; government opponents can
use information to criticize or seek to influence public
opinion by focusing on ‘sensitive’ topics. These issues can
only be tackled with education and awareness raising
Figure 3. The Ambivalent Role of Transparency
TRANSPARENCY CONDITIONS
fdgd
fdgd TRANSPARENCY CONSIDERATIONS Information should be:
pAccessible
HCost of data disclosure pReliable
HInformation overload pTimely
HLevel of technical jargon used pOrderly
HDistracting non-relevant data pClear
HPotential opportunistic behavior pUnderstandable
pAppropriate to user
information needs
pAvailable through proper

communication channels
7 The pillars of PFM are generally considered: budget reliability, transparency of public finances, management of assets & liabilities, policy-
based fiscal strategy & budgeting, predictability & control in budget execution, accounting & reporting, external scrutiny & audit. See Public
Expenditure and Financial Accountability (PEFA) Framework 2016.
4. The Ambivalent Role of Transparency 24

This transparency dilemma requires that public Recently, a trend has emerged to prepare specific
entities design their information systems and the reports for citizens (e.g. popular reports using
reports that can be produced from them to ensure that storytelling and visualization techniques), which should
each category of stakeholder can access information be better understandable, so meeting their information
that is relevant to them. It becomes necessary to use needs. They can then choose if they wish to drill down
communication tools that fit the information needs of all to more detailed information using IT tools. This is a
interested parties and channels of communication able benefit of the system, as accrual accounting can produce
to ensure that relevant information reaches the right financial reporting more easily understood by citizens,
groups of stakeholders. This need is reflected in the set of but at the same time more complete.
qualitative characteristics of financial reporting defined
by the main international accounting standard setters Box 2 provides a summary of the challenges related to
(IPSASB) in which reporting entities are required to accrual accounting and transparency highlighted during
provide accounting data that meets both accountability interviews for this paper.
and decision-making function needs.8 Consequently, top
managers responsible for accounting data are required
to focus their disclosure on key financial information and
key performance indicators.
BOX 2×
Practical Insights: Accrual accounting
and transparency
Financial reports need to be simplified, more × Full disclosure is especially challenging when
"popular", and to be effectively communicated to liabilities exceed assets, so that the government
citizens. Then the information will become useful reports a negative net worth: citizens and
for them and they will be persuaded about the other users must be helped to interpret what
necessity of the reform. This needs dialogue with this means and what the implications are. As
stakeholders and consultation. a matter of fact, a negative net worth does not
mean the same as in the private sector (i.e.
× The more informed the citizen, the better for
financial distress), nor does it necessarily imply
equity and justice in the country. The citizens
that the financial condition of the public sector
become more responsible, and in this way, they
entity is bad. The negative value can derive, for
care about the future and the intergenerational
example, from the missing consideration of some
equity; at the same time, they can hold
categories of assets.
government accountable for its actions.
× The press (mass media) can play an intermediary

× The increased transparency of full accrual
financial reports helps disclose information that
role to translate and interpret the accounting
is unfavorable and uncomfortable to politicians,
numbers for citizens.
who should be held accountable for the results
× Attention should be paid to avoid overloads. of their decisions using effective accountability
Accountants have to exercise some judgment: mechanisms. The level of financial literacy of
not everybody needs to know all the details. politicians affects the way they understand the
Public scrutiny should concentrate on the issues implications of their own decisions and actions,
that matter most. which will also be reflected in accrual accounting
× Standard reporting and financial statements information, especially in a long-term horizon.
should be visualized and made easily accessible
on web sites.
8 The qualitative characteristics defined in the IPSASB Conceptual Framework (2014) are: relevance, faithful representations,
understandability, timeliness, comparability, verifiability, materiality, cost benefit, balance between the qualitative characteristics.
25 4. The Ambivalent Role of Transparency

5
ENABLING CONDITIONS
FOR ACCRUAL ACCOUNTING
IMPLEMENTATION
The implementation of accrual accounting in the
public sector relies on a set of parameters. When they
facilitate implementation, they are usually described
positively as "enablers" or "facilitators" of the process.
When they hinder the implementation, they are
usually called "obstacles". The lack of an enabler often
corresponds to an obstacle. In essence, the enablers
are the necessary building blocks for the successful
implementation of accounting reform and they must
exist in a sufficient quantity-capacity ratio and for
the necessary time span, as reforms are a long-term
undertaking.
" Accrual accounting reform is a
difficult path to follow; you need
constantly to take the thorns out
of the path.
" There must be an investment in
accrual accounting transition
for the benefit of the country.
Politicians will receive
appropriate and comprehensive
— Dimitrios Paliouras financial information for better
decision making and for better
management in the government.
Enablers can be classified as technical and non- Accruals accounting is a
technical, or as internal and external,9 but the necessity for a country that wants
overall appetite for change is a key factor. The
to be part of the modern world.
literature proposes several drivers for the successful
introduction of accrual accounting (see Figure 4 and
— Marios Hadjidamianou
Annex 2). Reform is a considerable change for a public
administration in which customarily budgeting and cash
accounting prevail. This change may be envisaged with
reluctance and resistance as it threatens the status
and human; (5) amendment of legal and regulatory
quo which feels comfortable and familiar. Some are
frameworks; (6) definition of the structure of the
less willing to leave their comfort zone. Addressing the
new public sector accounting system; (7) definition
behavior and the attitude of everyone involved, whether
of risk management and mitigation mechanisms; (8)
producing the accounting information or using it for
development of change management and capacity-
decision-making and performance measurement, is
building strategy; (9) integration between different PFM
essential. In this sense, behavior can be a distinctive
functions and upgrading the existing integrated financial
obstacle, apart from other reform issues concerning
management information system or developing a new
leadership, project management, and resources, and
one; (10) establishment of monitoring and evaluation
can be challenging to deal with.
arrangements.
Political support and ownership of the reform
The enablers of accrual accounting can be grouped
play a key role. Successful reforms require a well-
into three intertwined pillars: 1) goal setting and
conceived and well-managed plan and high-level
processes, 2) human capital, and 3) technical (see
leadership to orchestrate the necessary human and
Figure 4 and Annex 2). The interactions among the
financial resources, mobilize and motivate all involved
enablers of successful accrual accounting implementation
towards implementation, and address the challenges
are shown in Figure 5. This illustrates that the three
and obstacles.10
elements belonging to ‘goal setting and processes’ are
Public sector accounting reform implementation intertwined with each other, and no implementation plan
challenges can be divided into ten groups. Noting can be successful without the appropriate human capital
the interconnectedness among them, Gourfinkel (2021) (in terms of knowledge and ability of both member staff
classifies these as: (1) political support and willingness and experts) and the availability of appropriate tools,
of the key stakeholders to initiate and carry out the such as IT financial management systems, a suitable
reform; (2) agreement on a reform strategy and feasible chart of accounts, and a set of comprehensive accounting
implementation timeline; (3) establishment of proper standards and policies for implementing them.
reform coordination and management arrangements;
(4) availability of required resources, including financial
9 The World Bank, PULSAR 2021a, pp. 9-10.

10 Ibid.
27 5. Enabling Conditions for Accrual Accounting Implementation

Figure 4. Enablers of Accrual Accounting
GOAL SETTING AND PROCESSES HUMAN CAPITAL TECHNICAL
× Political support and × Training and educating × IT financial management

ownership public sector accountants systems
× Implementation plan × Human capacity (Adequate × Chart of accounts

number of qualified staff)
× Accrual accounting × Accounting standards and
integrated in decision- × Expert support policies
making and performance
management
Figure 5. Interactions among the enablers of accrual accounting implementation
POLITICAL
SUPPORT
ACCOUNTING
IMPLEMENTATION
INFORMATION
PLAN
INTEGRATION
HUMAN
TECHNICAL
CAPITAL
5. Enabling Conditions for Accrual Accounting Implementation 28

BOX 3 Practical Insights: Enabling conditions for accrual
accounting implementation
Interviewees were asked about the enabling × Civil service culture and mentality are mainly
conditions necessary for successful implementation attached to cash basis; unless this is altered,
of accrual accounting. The following is a summary of there will be resistance to change.
their views based on their experiences.
× The new logic can attract professionals with
× Political support, especially from the ministry of fresh views who understand modern financial
finance, is a prerequisite for a political reform to management, costing, and performance
be successful. Political support secures human management. Private sector experts in financial
resources and other necessary resources for the accounting may also support public sector
reform. entities in the transition to accrual accounting.
× A dedicated reform team with skills and vision × Embedding accrual in PFM. This includes the
is absolutely necessary. The reform needs very introduction of rules and incentives to work
good project management, and a clear plan. with accruals, analyzing problems and decision-
making using accrual data, alignment of
× Terminology in accounting is important, and
performance measures with accruals, embedding
not everybody understands accounting. Both
accruals in the fiscal rules, key performance
preparers and users should understand the
indicators, and demand for accrual information
accounting language. Training and awareness
from supervisory bodies and auditors.
raising activities are therefore necessary, and
academics can assist the training process. × The use of accrual budgeting could be also
considered, at a more advanced stage.
× The IT system needs to embed the changes
related to the accrual accounting processes.
29 5. Enabling Conditions for Accrual Accounting Implementation

6
THE COSTS OF ACCRUAL
ACCOUNTING IMPLEMENTATION
Although accrual accounting brings benefits its
implementation can be a costly reform. Costs largely depend
on the accounting maturity of the public sector, the availability
of IT systems, and the size of the government. A recent study
about the total cost of European Public Sector Accounting
Standards (EPSAS) implementation in all general government
subsectors (central, state, local, and social funds) across the
EU-27 Member States and the UK ranges between €0.8 billion
and €6 billion, which represents an average cost ranging from
0.006% to 0.045% of gross domestic product (PwC 2020, p. 3).11
It should be noted, however, that the estimated cost of EPSAS
implementation is expected to be spread over several years,
and would therefore have a more limited impact on annual
government expenditure (PwC 2020, p. 18).12 As a result,
spread over five years, the cost per inhabitant (under the
most expensive scenario in the analysis) would be less than
€1 per year for more than two-thirds of the 28 countries
covered (PwC 2020, p. 25).
11 PricewaterhouseCoopers 2020.
12 Ibid.
" Cost appears to be objective,
but in reality, it is subjective. It
depends on how it is framed and
what it includes. It is challenging
to articulate the benefits, and
measuring them is even harder.
— Ian Carruthers
6.1 Types of Cost

The total costs related to accrual accounting reform
include non-IT costs (referring to policies, processes, and
people) and IT-costs.13 Both groups could be split into
two categories: the additional costs to implement accrual
" If you see the accrual accounting
reform as a mechanism to
change the central system, to
change everything, it is very
accounting, and those that refer to the reallocation of expensive. Counting only on
resources devoted to other financial management
consultants drives the costs
activities, now flowing to accrual accounting. Moreover,
the sounder management of resources, allowed by higher and may bring resistance
accrual accounting information, is expected to lead to a to change. However, some
reduction in the costs incurred to perform public sector investments are already in place,
activities and deliver services. These (unrecorded) cost
savings should not be neglected in the analysis. The
for example entities already have
quantification of the net cost of the accrual accounting software and functionalities,
reform (i.e. the total cost minus the cost savings) should and a chart of accounts that is
also be calculated (Figure 6). This net cost is therefore
centrally managed.
reliant on the actual use of the accrual accounting
information for the benefit of public administration and
management.
— Luis Viana
13 Ibid.
31 6. The Costs of Accrual Accounting Implementation

Figure 6. Cost of Accrual Accounting Implementation
Additional cost for

accrual accounting
implementation
Total cost
Cost
of accrual
savings Net cost
accounting
of accrual
accounting
Reallocation of
resources
6.2 Additional costs that relate to 6.3 Reallocation of resources

accrual accounting
These costs refer to resources that would otherwise
be either idle or used in other areas of PFM. They may
These costs refer to the cost incurred in order to set up
include expansion of the responsibilities of public
and implement accrual accounting over and above the
sector accountants to include accrual accounting, use
costs that would take place without it. They relate to
of existing IT financial systems, and commitment of
personnel training, expert and consulting fees, and the
resources to develop new laws, accounting standards,
cost of new IT financial management systems or upgrade
policies, guidelines, etc. This cost is highly related to the
costs of the existing ones,14 the hiring of new personnel,
accounting reform but is not easy to identify, unless a
etc. These costs are closely linked to the accounting
cost accounting system is in place. This cost may not
maturity level of the country (e.g. whether the transition
affect the budgets of public sector entities.
is from cash accounting, modified cash, or modified
accrual basis), the capacity of the existing IT systems, The overall cost of an accrual accounting reform results
the complexity of the transactions of the entities, and from adding up the additional costs and the reallocated
the scope of the reform. resources. In order to keep the cost of the accounting
reform under control the costs should be budgeted both
on a yearly basis, as well as on a project basis (i.e. accrual
accounting introduction), and should be monitored
14 Adapting current systems to integrate additional modules, necessary to capture accrual accounting transactions, can prove as costly as
the introduction of a completely new financial management information system (PULSAR 2018).
6. The Costs of Accrual Accounting Implementation 32

and followed up at all stages. The cost of introducing
accrual accounting will not be stable throughout time, as
"
investments and operating expenses will vary depending
on the stage of the project. There is also a difference
between the outflow of financial resources and the cost
of the project measured through accrual accounting.
Expenses are high in the
For example, the financial outflows for acquiring new
beginning, but the benefits last IT financial management systems may happen early,
for many years, 10-15 years while the depreciation cost of the IT could be split
probably. evenly over a given time period. The accrual accounting
implementation plan should include a clear analysis
of the necessary resources and costs throughout the
— Marie-Pierre Calmel
process. The means of financing the necessary resources
must be clear from the start (e.g. European funds, grants,
government sources, etc.), as budget constraints can
hinder accounting reforms (Figure 7).
Figure 7. Dimensions for Cost Considerations
FINANCIAL
TIME FLOWS
SOURCE
Total project Budget Government

cost flows funds
Annual Accrued Other

costs costs sources
33 6. The Costs of Accrual Accounting Implementation

6.4 Cost savings due to benefits
from better decision-making
The total implementation costs of accrual accounting
reform can sometimes be assessed by referring to
the accounts. However, the use of accrual accounting
information for decision-making is expected to improve
" There is a cost for educating
civil servants in terms of accrual
accounting. Nevertheless, as
the activities of the government
an entity’s efficiency and effectiveness. Thus, it can
have become more demanding
eventually decrease the cost that would have been
incurred by the entity, if this information set were not
and more complicated during
available. Earlier studies support that accrual accounting the last years, civil servants
information outperforms cash-based accounting should undergo major training
information for resource allocation decisions.15 Cost
savings are difficult to measure and quantify as they
for their everyday work, in one
are not separately registered in accounting books. Still way or another. This would
they correspond to benefits that should not be ignored. need to happen irrespectively
The more accrual accounting information improves
of the accrual accounting
decision-making, the higher the chance for these savings
to become material.
implementation. The same holds
true for IT systems.
Therefore, the net cost of accrual accounting is the
difference between the total costs that relate to accrual — Marios Hadjidamianou
accounting minus the (unrecorded) cost savings due to
better decision-making.
BOX 4 Practical Insights: Costs of accrual accounting

implementation
Interviewees were asked about the cost of accrual to accrual accounting systems, they refer to PFM
accounting implementation. The following is a systems including accrual accounting.
summary of their views based on their experiences.
× There is no need for a lot of new staff. The
These views clearly show the complexity of the cost
existing human resources will be used for accrual
estimation challenge.
accounting. However, there is a significant cost
× The lifetime cost should be considered and not for training.
just the cost of the next budgeting period.
× There is also a cost for communicating the reform
× The relation between cost and benefits is also to citizens and cost for external consultants.
relevant to the time frame of the analysis. The
× As to the relation between cost and benefit, most
benefits occur over time, while the investment
of the benefits of accrual accounting and PFM will
must be made upfront.
be evident in the next day when the information
× Changes in IT systems are usually the most is available and it is properly used.
expensive part. The costs correspond not only
15 Respondents in some studies even find that the benefits associated with the implementation of accrual accounting outweigh the costs
(Kober et al. 2010).
6. The Costs of Accrual Accounting Implementation 34

7
CONCLUSIONS
The objective of this knowledge paper was to present
the benefits of accrual accounting, but also its costs,
and to pinpoint the enablers for accrual accounting
implementation. It used the available literature and
targeted interviews to achieve this.
The main benefit of accrual accounting was identified

as the additional information it provided that could be
used for decision-making and for accountability. This
information adds value by supporting informed decision-
making, including by providing more granular financial
information that can improve cost management and
be used for resource allocation decisions; assessing
department and program performance; managing assets
and liabilities; determining costs for goods/services; and
informing asset acquisition decisions and rationalization
of activities. It can be used for planning and forecasting,
analyzing trends and budgets, achieving value for
money, debt management, project management, and
the formulation of fiscal policies.
Accrual accounting can enhance accountability by Cost was found to be a significant parameter in accrual
increasing the transparency of the cost of goods and accounting implementation. Up-front costs such as IT
services and the management of assets and liabilities. systems and staff retraining could be significant. But, as
This improves fiscal credibility and allows for greater with many investments, after high initial costs benefits
stakeholder scrutiny, including by citizens if information were then spread over the following years.
is made accessible. Although more transparency must
not be allowed to tip into an information overload: The literature and interviewees all point to accrual
stakeholder groups should be identified and helped accounting having the potential to provide interested
to grasp the essentials of the financial reports through parties with better information, that is reliable, focused,
the availability of easily read and understood material. and complete. This could contribute to more rational and
more effective decision-making; and increase entities’
The transition to accrual accounting is often a gradual accountability. But this is not a guaranteed outcome: the
process. Reform enablers were identified, divided among data must be used for its benefits to become apparent.
three intertwined pillars: goal setting and processes, The time and cost of reform would only be exceeded by
human capital, and technical. The first focused on the benefits if supported by governments and politicians
high-level ownership and support, well planned who make use of the resulting financial information
implementation, and integration of accrual accounting (even when it does not bring good news).
into decision-making and performance management.
The second on training accounting staff and engaging Finally, as there is a general agreement on the fact that
external support for the process as needed. And the accrual accounting can be beneficial for citizens, the
third on establishing the appropriate IT systems, tools, reform implementation must aim at reaching them,
and legislation/guidance. with specific basic documents, targeted on their needs,
and easily readable; and offering at the same time the
possibility to obtain detailed information, by querying
the open data bases.
7. Conclusions 36
ANNEX
1
COUNTRY CASES: ACCRUAL
useful economic information pertaining to contingent

Accrual Accounting in Cyprus liabilities. Additionally, the presentation of the true
and fair financial situation of each Line Ministry as well
as of the whole of the government will be reinforced.
In the same vein, the new accounting basis will form
a valuable tool at the disposal of each Line Ministry
for the assessment of the latter’s performance and
accountability, since the decisions to be taken will have
Cyprus decided in 2016 to change the accounting basis to be supported by the true economic facts applicable to
of the central government from cash to accrual as part them. The relevant actions of the project are underway.
of a PFM reform and adopt IPSAS. The adoption of the Apart from making the underlying change, one of the
accrual accounting basis in the public sector is expected central axes of the Public Financial Management Reform
to strengthen the trustworthiness and credibility of is the change in the mentality of all the parties involved,
the Government’s financial statements and support including the top management and other personnel
the decision-making centers through the provision of that work for the government, in order to achieve
comprehensive financial and other information. The better financial management of all public resources
country expects considerable benefits of this reform available. The timing of the transition to the accrual
in the medium- and long-run. It is expected that the basis of accounting coincides with the initiative of many
transition to accrual accounting will, among other things, countries in Europe and internationally to produce more
enable Line Ministries to identify and utilize their assets, trustworthy and useful financial information. The current
to know in real time who their debtors and creditors plan is that the implementation of IPSAS will take place
are (thus improving the collectability of funds owed within the next couple of years. To this end, a number
to the government), and enable more effectively and of accounting policies have already been issued and
timely management of significant risks via providing approved by consultants for their compliance with IPSAS,
37 Annex 1. Country Cases: Accrual Accounting Implementation

and draft financial statements of the central government
corresponding to the transition period have been
Accrual Accounting in Portugal
developed. An Enterprise Resource Planning System
covering the functional areas of accounting, budgeting,
human resource management, and payroll/pensions
is expected to become operational soon, to enable the
accrual accounting implementation process. Most of
the public sector in Cyprus already implements IFRS
and is planned to transition to IPSAS in 2024. Cyprus In Portugal, accrual accounting was introduced in 1997
aims at developing consolidated financial statements through the Public Sector Plan of Accounting, which
based on IPSAS for the whole public sector (including contained an integrated system with three subsystems:
entities controlled by the government) in 2024. There budgetary (modified cash), financial (accrual), and cost
will be a common chart of accounts only for the central (accrual) accounting. The system was set to provide
government. The entities of the wider public sector information for monitoring budget accomplishment,
will use specific templates (under development) to assets and liabilities (and their evolution), and the costs
provide the necessary information for the purposes of of public services and activities. In 2013, the Government
consolidation. embarked on reform of public sector accounting to adapt
it to the IPSAS, part of a wider reform with the objective
to link the accounting system with government financial
statistics and PFM instruments. The reform included
Accrual Accounting in Greece accrual budgeting, performance measurement, and
reporting. The new System of Accounting Standards for
Public Administrations was passed in 2015, although the
whole reform was not completed due to a pause in 2018
and the budget continued being prepared with modified
cash accounting. Momentum returned in 2020 due to
the COVID-19 crisis, when the National Recovery and
Resilience Plan under the EU Recovery and Resilience
Greece passed a law in 2018 for all public sector
Facility again made the reform a priority.
entities to adopt a new accrual accounting framework
for the general government from 2023 as part of
One advantage is that the accrual accounting system
large-scale PFM reform. The main goals of introducing
provides reliable information about national accounts
accrual accounting were to increase transparency and
and some indicators from the consolidated system,
accountability in government accounting and PFM.
aimed at supporting sound fiscal management, including
Accrual accounting adoption would make possible the
the ability to identify and face fiscal risks. As for the
production of better information for national accounts
use of the information, there are differences between
and would improve financial management at the micro
different levels of government. In local government,
level. The framework is inspired by IPSAS. A new chart of
accrual accounting reporting is used for decision-making
accounts consistent with European System of Accounts
in public-private partnership and leasing and there is a
(ESA) 2010 and Government Finance Statistics Manual
benchmarking process that encourages governments
(GFSM) categorizations has been developed (and is
to improve financial sustainability, management, and
already being used for budgeting purposes at the central
efficiency. There are also rules that require the use of
administration level) and accounting policies have started
accrual accounting, such as control of the level of debt
to be issued. The Greek central administration will move
or assets management.
from modified cash accounting to accrual accounting,
while local governments, public hospitals, social security
funds, and other public entities will adapt their existing
accrual accounting systems. A new IT system for PFM in
the central administration funded by the EU Recovery
and Resilience Facility will support the process. The
incorporation and the recording of all workflows will
facilitate accrual accounting and will allow for better
monitoring of accounts and arrears.

the parts of departments run separately as ‘executive
Accrual Accounting in France agencies’ as these were created. In each case, to allow
time for the systems and processes required to support
accrual accounts to be introduced, ‘dry-run’ (unpublished)
accounts were prepared. The dry-run accounts were
reviewed by the National Audit Office (NAO), and when
it was satisfied that accounts of auditable quality could
be prepared, an ‘accounts direction’ was issued requiring
France has a long tradition of accrual accounting in the the agency to produce GAAP-compliant accrual accounts.
public sector, dating back to 1962. The most recent A similar approach was adopted for the introduction of
reforms, e.g. the Loi Organique des Lois de Finances accrual-based departmental accounts. All departments
in 2001, modified the functions and organization of were required to prepare dry-run accounts for 1998/99.
public sector accounting, at both central and local level. The first audited accrual accounts to be laid before
The accounting reform emphasizes links among the Parliament were in respect of 1999-2000. The scale of
three main accounting systems: budgetary accounting, the changes required meant that there were a number of
financial accounting, and management accounting. For all problems with the first sets of accounts, but the quality
three systems, an annual report has to be prepared. The of the accounts significantly improved over the following
Public Sector Accounting Standards Council, established years.
in 2008, has an important role in the reform process, in
charge of setting the accounting standards of all entities As a result of the time required to resolve the accounting
with non-market activity. The central government and issues, accrual budgeting was introduced in two stages,
government organizations, territorial authorities, local with the first accrual-based Parliamentary appropriations
public agencies, and social security organizations all for 2001-02. These excluded charges for depreciation,
fall within the jurisdiction of the Council. France has cost of capital, and provisions, which were subsequently
kept public sector accounting as close as possible to the included in the appropriations for 2003-04.
business model: the Central Government Accounting
Standard 1 “sets out the structure and form for financial The introduction of accrual accounting and budgeting
statements using business accounting as a model, with required new primary legislation in the form of the
due consideration for the specific features of the central Government resources and Accounts Act 2000 (the Act).
government”. This also included legislation to enable the preparation
of consolidated Whole of Government Accounts (WGA),
eventually to cover the whole of the UK public sector.
The WGA program started in early 1999 with the
Accrual Accounting in United creation of a new project team to lead the development
and implementation of the necessary processes and
Kingdom systems, as well as the gradual convergence of accrual
accounting policies across the UK public sector, as well
as the transition of the accounts for taxation, central
debt and currency reserves, and public sector employee
pensions onto an accrual basis.
The UK Government Financial Reporting Manual (FReM)

sets out the core guidance for preparing accrual-
Accrual accounting was introduced gradually across the
based government annual reports and accounts in the
UK public sector at different times, with government
United Kingdom. It is prepared under the oversight of
departments among the last to adopt accrual accounting
the independent Financial Reporting Advisory Board
in preparation for the introduction of accrual-based
(FRAB) which reports annually to the UK Parliament and
budgeting from 2001/02 onwards.
Devolved Governments. Under the Act, the accounts must
Until the 1990s, central government departments be prepared under IFRS subject to those adaptations
planned and reported their expenditure on a cash necessary in the context of public sector accounts.
basis. Accrual accounting was introduced ‘piecemeal’ in In practice this means that the accounts are largely
39 Annex 1. Country Cases: Accrual Accounting Implementation

IPSAS-compliant. The FReM applies directly to all public × Introduction of professionally qualified board-
sector reporting entities other than: local government, level Chief Financial Officers in all government
some state-owned enterprises, and NHS Trusts, NHS departments, supported by strengthened, centrally
Foundation Trusts and Clinical Commissioning Groups. coordinated government finance profession;
These groups of bodies have their own sets of accounting

× Implementation of an integrated central financial
data system, bringing together three legacy systems,
guidance, which are consistent where appropriate with
covering departmental appropriations, budgets, in-
the FReM, and are also overseen by the FRAB.
year data and end of year data, as well being used
WGA coverage was gradually expanded in two stages, for WGA preparation;
from central government initially, to the whole of × Increased alignment of the government
the UK public sector, with a series of data collection appropriation, budgeting, financial reporting and
‘milestones’ and dry-runs used to develop and test the statistical accounting framework to provide more
necessary systems and processes. Following a change consistency for financial control and planning; and
in government in 2010, the first WGA were published
in November 2011 for the year ended 31 March 2010.
× Increased role for balance sheet information in
government budgetary and fiscal frameworks, as well
Alongside the development of WGA, and building on as strengthened central management of contingent
their implementation, a number of further initiatives liabilities and guarantees.
have been implemented in order to build on these
reforms to strengthen PFM through the use of accrual-
based information:

ANNEX
2
ENABLING PILLARS OF ACCRUAL
necessary resources. Political ownership can be

Goal Setting and Processes affected by externally imposed reforms and changes in
governments with different agendas.
Political support and ownership

Clear and stable political support and ownership is a Implementation plan
key factor for successful implementation of the reform.
This is usually related to a clear understanding of the A well thought out, pragmatic plan with milestones
benefits of accrual accounting by top-level politicians, for clear outcomes and budgeted deployment of the
who prioritize the reform and commit to devote the necessary human capital, technical tools, and financial
resources is a significant enabler.16 Not all countries
"
have the same starting point and therefore the plan is
country specific. The plan should be closely followed up
and adjusted to changes faced through the process, both
As the reform usually takes time-wise and budget-wise. International experience
suggests that flexibility is necessary as not all challenges
more time that the term of a can be predicted from the outset, and it will be necessary
government, continuous political to revisit and adjust or revise many roadmap details
support is necessary. during implementation.17 Risk management is therefore
important. There should also be structures for regular
— Dimitrios Paliouras
16 The World Bank, PULSAR 2018.
41 Annex 2. Enabling Pillars of Accrual Accounting Implementation

"
Accrual information integrated in
decision-making and performance
Dialogue is needed, from the management
very beginning, with the Supreme
Audit Institution, to ensure its Accrual accounting implementation can become just a
ceremonial reform if use of the resultant information is
agreement and its continuous not embedded in public administration decision-making
support. and performance measurement.20 Accrual accounting
implementation should be accompanied with the
— Marie-Pierre Calmel development of processes where accrual accounting
information is a component for management and policy
decisions. This not only requires changes in legislation
but also in behavior and processes. Training of public
administrators in accrual accounting to understand its
dialogue with different stakeholders and ministries.18
information content and acquire the necessary skills and
The use of pilot entities can provide important input in
knowledge is an important enabler.
the process before full-scale implementation.19 Political
support and ownership materially affect efficient project
management.
Figure 8. Human Capital and Technical Tools in Implementation Plan
Human
Education capacity
(qualified staff)
Standards
Expert
and
Support
Policies
IT financial
Chart of
management
accounts
systems
IMPLEMENTATION
PLAN
18 The existence of a collaborative process may be a determinant for the success of the implementation of the reform (Gomes et al.
2015).
19 Pilot experiments are expected to provide feedback on the main difficulties felt in the implementation of a new public sector
accounting system and therefore help to define a global strategy to overcome the problems identified and to improve the system to be
generally and finally put into practice (Jorge et al. 2021).
20 There is a frequent mismatch between the needed accounting and performance measurement information for internal and external
purposes assessed on the basis of the administrative system in place and the accounting information and performance measurement
information required by the law for decision making and accountability (Cohen et al. 2019).

Human capital Human Capacity
Based on the accrual accounting implementation plan,
Training and Educating Public Sector the necessary human resources in terms of qualified
accounting staff should be deployed. Understaffed
Accountants accounting departments are unwilling to assume
additional responsibilities to those they already perform.
Public sector accountants involved with budgeting and
The existence and the development of sophisticated and
national accounts reporting are not always familiar
well developed IT financial management systems may
with accrual accounting. This can lead to reluctance
affect the necessary staffing.
and resistance as they face something unknown
and different. Vocational training and continuous
professional development are the foundation for a
highly professional workforce, a critical precondition Expert Support
for public sector accounting reforms.21 Training and
education are needed to understand not only the accrual The set up and planning of accrual accounting reform
accounting technicalities but also its information content should be supported by experts with experience of
and relevance for decision-making and performance similar projects worldwide. Experts and consultants can
measurement. Traditional and on-line training modes assist with project management, consult on technical
can be adopted with both general and customized tools' sequencing and content, and provide training
training syllabi for different groups. Training should take support. Moreover, the assistance of academia is
place in tandem with the adopted accrual accounting considered important in both training, standard setting,
standards, accounting policies, the chart of accounts, and policy formation.
and the IT financial management systems in place. Key
accounting personnel should be certified in public sector
accounting. Staff in supreme audit institutions also need
to be trained in accrual accounting. Training initiatives
could be supported by experts from the profession and
Technical
academia.
IT Financial Management Systems

Accrual accounting reform is also technical. A massive
"
amount of financial information and new registries (e.g.
for fixed assets, financial instruments, provisions) need
to be set up. IT financial management systems should
Public sector financial managers be able to facilitate the accounting registry process
should feel proud to apply without duplication of work. They must simultaneously
accrual accounting, as they are produce information for budgeting, accrual accounting,
and national accounts reporting purposes and be able
contributing to the public good. to communicate with other IT systems for information
retrieval and data exchange. IT systems should be
— Bernhard Schatz flexible enough to accommodate future needs (e.g.
cost accounting). Proper IT financial management
systems can be a significant enabler for accrual
21 The World Bank, PULSAR 2020a.
43 Annex 2. Enabling Pillars of Accrual Accounting Implementation

accounting implementation. Their lack can jeopardize
the accrual accounting reform. All PULSAR countries
Accounting Standards and Policies
have recognized the value and importance of modern
While different countries adopt different variations of
financial management IT systems as a precondition for
accrual accounting standards for a variety of reasons,24
a successful public sector accounting reform process.22
increasingly most use IPSAS directly, indirectly, or as
a common point of reference.25 Accounting standards
involve judgments about depreciation, impairment,
Chart of Accounts provisions, write offs of receivables, measurement
of pension liabilities, evaluation of financial assets
The chart of accounts is a technical tool of high and financial liabilities, etc. Specific guidelines and
importance. It should accommodate the needs for instructions issued in laws or ministerial decisions or
accounting, budgeting, and performance as well as the other administrative documents on how the accounting
needs for reporting under the ESA 2010 or GFSM. It standards and the accounting policies are to be
should also be properly structured to serve consolidation implemented in practice are needed. These directions
purposes. Setting up an operational chart of accounts should be also used to train people on how to implement
for accrual accounting that fits well in the IT financial accrual accounting. The chart of accounts should be
management system is a significant enabler of the properly developed to account for the application
reform. 23 of standards and accounting policies. First time
implementation of accrual accounting may need extra
guidance and significant time to be concluded. Experts
can provide support and help to translate public sector
accrual accounting standards into practice.

23 Charts of accounts have been the subject of considerable interest and discussion in EPSAS Working Group meetings and an Issue
Paper has been developed for this purpose. PricewaterhouseCoopers 2017.
24 Manes Rossi, Cohen, Caperchione, & Brusca 2016.
25 IFAC-CIPFA 2021.

ANNEX
3
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Centre for Financial Reporting Reform (CFRR),

Governance Global Practice,

The Public Sector Accounting and Reporting Program

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Cover design: Ecaterina Gusarova

1. INTRODUCTION - WHAT IS ACCRUAL ACCOUNTING? 7

2. ACCRUAL ACCOUNTING AND FINANCIAL MANAGEMENT REFORMS  11

3. BENEFITS OF ACCRUAL ACCOUNTING - FOR WHAT AND FOR WHOM? 13

3.1. Analysis of the Benefits in Practice: Literature Review 16

3.2. Analysis of the Benefits in Practice: Country Examples  19

Example 1. School infrastructure information for decision-making 21

Example 2. Registration and follow up of grants provided for specific purpose  21

Example 4. Impairment of receivables to reflect recoverable amount  22

4. THE AMBIVALENT ROLE OF TRANSPARENCY 23

5. ENABLING CONDITIONS FOR ACCRUAL ACCOUNTING IMPLEMENTATION 26

6. THE COSTS OF ACCRUAL ACCOUNTING IMPLEMENTATION  30

6.1. Types of Cost 31

6.2. Additional costs that relate to accrual accounting 32

6.3. Reallocation of resources 32

6.4. Cost savings due to benefits from better decision-making 34

Accrual Accounting in Cyprus  37

Accrual Accounting in Greece  38

Accrual Accounting in Portugal  38

Accrual Accounting in France  39

Accrual Accounting in United Kingdom  39

Annex 2. Enabling Pillars of Accrual Accounting Implementation  41

Goal Setting and Processes  41

Political support and ownership 41

Accrual information integrated in decision-making and performance management  42

Training and Educating Public Sector Accountants 43

IT Financial Management Systems  43

Accounting Standards and Policies  44

Annex 3. List of References  45

EFSF European Financial Stability Facility

EPSAS European Public Sector Accounting Standards

ESA European System of Accounts

GFSM Government Finance Statistics Manual

IFAC International Federation of Accountants

IFRS International Financial Reporting Standards

IPSAS International Public Sector Accounting Standards

IPSASB International Public Sector Accounting Standards Board

NPM New Public Management

OECD Organisation for Economic Co-operation and Development

PEFA Public Expenditure and Financial Accountability

PFM Public Financial Management

PULSAR Public Sector Accounting and Reporting Program

3 Acronyms and Abbreviations

Accounting can be defined as a process of recording,

1 Jones and Pendlebury 2000.

1. Introduction - What is Accrual Accounting? 8

Table 1. Main Features of Accrual vs. Cash Basis Accounting

Accrual basis Cash basis

All economic transactions including complex

More complex (requires specific relevant

9 1. Introduction - What is Accrual Accounting?

Requires understanding of specific principles and Easier as it involves only cash

Improved when the same set of accounting

Reported when they are

Reported when resources are used or when they

Limited to cash flows related to

1. INTRODUCTION - WHAT IS ACCRUAL ACCOUNTING? 7

2. ACCRUAL ACCOUNTING AND FINANCIAL MANAGEMENT REFORMS 11

3. BENEFITS OF ACCRUAL ACCOUNTING - FOR WHAT AND FOR WHOM? 13

3.1. Analysis of the Benefits in Practice: Literature Review 16

3.2. Analysis of the Benefits in Practice: Country Examples 19

Example 1. School infrastructure information for decision-making 21

Example 2. Registration and follow up of grants provided for specific purpose 21

Example 4. Impairment of receivables to reflect recoverable amount 22

4. THE AMBIVALENT ROLE OF TRANSPARENCY 23

5. ENABLING CONDITIONS FOR ACCRUAL ACCOUNTING IMPLEMENTATION 26

6. THE COSTS OF ACCRUAL ACCOUNTING IMPLEMENTATION 30

6.1. Types of Cost 31

6.2. Additional costs that relate to accrual accounting 32

6.3. Reallocation of resources 32

6.4. Cost savings due to benefits from better decision-making 34

Accrual Accounting in Cyprus 37

Accrual Accounting in Greece 38

Accrual Accounting in Portugal 38

Accrual Accounting in France 39

Accrual Accounting in United Kingdom 39

Annex 2. Enabling Pillars of Accrual Accounting Implementation 41

Goal Setting and Processes 41

Political support and ownership 41

Accrual information integrated in decision-making and performance management 42

Training and Educating Public Sector Accountants 43

IT Financial Management Systems 43

Accounting Standards and Policies 44

Annex 3. List of References 45