Survey on accrual accounting by European governments

  • FEE (Federation of European Accountants - Fédération des Experts-comptables Européens) (lt green) Image

30 Jan 2007

The European Federation of Accountants (FEE) has published a study reporting on the progress made by European countries in implementing accrual accounting in the public sector.

The three major findings are:
  • Approximately 80% of the countries that responded have adopted some form of accrual accounting across the full range and size of public bodies.
  • While some countries have made rapid progress in implementing accrual accounting, some others are currently in transition and a smaller group are still using cash accounting.
  • Most commonly, the transition is made first at the local level and only later at the national government level.
The study cites the following benefits of accrual accounting:

Accrual accounting facilitates better planning, management and decision making as well as providing a means with which to assess financial resilience. It can also assist better performance measurement and therefore performance management. So accrual accounting provides scope for organisations to manage their finances more effectively. It can permit more effective comparisons of some aspects of financial performance between different government departments and agencies as well as international comparisons. Comparison between government services for the purposes of competitive tendering as well as pre and post privatisation can also be made more readily if both sets of financial statements are prepared on the same basis.

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