SOURCE: PricewaterhouseCoopers LLP
Momentum growing for better public accounting
A PwC survey covering 100 countries reveals that while only 24% of governments currently use 'accrual accounting', 37% plan to move to this form of accounting in the next five years, bringing the total adoption rate to 63% of governments surveyed and representing an increase of 142%.
The majority of governments today still rely on 'cash accounting', which has been the primary method used by the public sector for many years. This form of accounting – which is based on cash payments and receipts being recorded as they occur – fails to capture information on public sector assets and liabilities and therefore presents a very short-term view of public finances.