Governments around the world are slowly but steadily moving away from cash-based accounting and toward accrual systems, according to the International Public Sector Financial Accountability Index 2025 Status Report from the International Federation of Accountants (IFAC) and the Chartered Institute of Public Finance and Accountancy (CIPFA).

The latest report tracks 169 jurisdictions and shows that 31 percent reported on accrual in their 2024 financial statements, up slightly from 29 percent in 2020.

Accrual reporting recognizes the economic substance of transactions when they occur, rather than when cash is exchanged. This method offers governments a clearer picture of assets, liabilities, and the true costs of programs and services. It also improved transparency, accountability, and long-term decision making. Still, the shift remains gradual, slowed by challenges such as limited funding, technical capacity, and political support. The pandemic also diverted resources and delayed reform plans.

The report projects that by 2030, 95 governments will be reporting on accrual, compared with 120 projected in 2021 edition. What is changing, however, is who is adopting. Accounting Today highlights that in 2024, most accrual-reporting jurisdictions were high-income, but by 2030, 60 percent of those using accrual are expected to be middle- or low-income countries. 

IPSAS standards are central to this transition. Two-thirds of jurisdictions reporting on accrual in 2024 used International Public Sector Accounting Standards (IPSAS) directly, through modification, or as a reference for national frameworks. By 2030, 81 percent of governments on accrual are expected to use IPSAS in some form.