REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the state of play of public accounting by the general government in the Union, taking into account the progress made since its 2013 assessment of the suitability of the International Public Sector Accounting Standards for the Member States
Date: 2025-12-05
Institutions: European Commission, Eurostat
Subjects: EU Member State, EU initiative, EU statistics, European accounting system, International Accounting Standards, data collection, public accounting, public administration

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   EUROPEAN COMMISSION  Brussels, 5.12.2025  COM(2025) 746 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the state of play of public accounting by the general government in the Union, taking into account the progress made since its 2013 assessment of the suitability of the International Public Sector Accounting Standards for the Member States {SWD(2025) 396 final}  
 
 
1. 

INTRODUCTION 

This  report  responds  to  the  requirement,  laid  down  in  Article 16(1)(a)  of  Council  Directive 
2011/85/EU1 (the Budgetary Frameworks Directive), as amended by Council Directive (EU) 
2024/12652,  for  the  Commission  to  report  by  31 December  2025  and  every  five  years 
thereafter on the state of play of public accounting by the general government3 in the Union, 
taking  into  account  the  progress  made  since  its  2013  assessment  of  the  suitability  of  the 
International Public Sector Accounting Standards (IPSAS) for the Member States. 

In  2013,  in  response  to  the  requirement  in  the  initial  Budgetary  Frameworks  Directive,  the 
Commission  published  an  assessment  of  the  suitability  of  IPSAS  for  the  Member  States4 
(2013 IPSAS report), which concluded that there was a strong need for harmonised, accruals-
based public sector accounting systems in the Member States and that IPSAS  would make a 
suitable  reference  framework  for  developing  European  Public  Sector  Accounting  Standards 
(EPSAS). The report also concluded that concerns with respect to governance and conceptual 
and technical matters of IPSAS would need to be addressed and proposed to proceed with the 
EPSAS  initiative.  As  a  result,  since  2013,  the  Commission  (Eurostat)  has  been  working  on 
that initiative. 

The  EPSAS  initiative  aims  to  provide  harmonised  accruals-based  public  sector  accounting 
suited  to  EU  needs.  The  main  benefit  would  be  the  provision  of  a  firmer  basis  for 
understanding the financial position and performance of public sector entities at all levels of 
government.  This  has  the  potential  to  improve  evidence-based  decision-making  and 
accountability  at  EU, national  and sub-national  levels.  In  addition,  it  would further  enhance 
the  integration  and  efficiency  of  capital  markets  and  the  analysis  of  sustainability  of  public 
finances.  It  would  also  provide  more  efficient  ways  of  producing  statistics  and  controlling 
revisions and risks. 

The EPSAS initiative builds on the premise of the significant benefits of harmonised accruals-
based  accounting  while  acknowledging  that  the  costs  of  implementing  such  accounting  are 
also likely to be significant. Accruals-based financial accounting systems are recognised as a 
‘gold standard’ of accounting systems for both the private and the public sector. The benefits 
come from the fact that cash and mixed accounting systems do not provide complete financial 
information.  Because  cash  and  mixed  accounting  systems  focus  on  capturing  and  reporting 
movements  of  cash, 
important  elements  underpinning  economic 
developments and decisions, in particular comprehensive information on assets and liabilities, 
accrued  expenses,  revenue  and  recognition  of  assets  during  their  entire  useful  life. 
Furthermore, significant additional benefits can be expected if governments go beyond what 
is  necessary  to  comply  with  accrual  accounting  rules.  The  main  driver  for  Member  States 
having  implemented accrual  accounting reforms has been the need to  build  up management 
information systems that enable sound and well-informed decision-making. 

they  miss  several 

frameworks 

1 Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member 
States (OJ L 306, 23.11.2011, p. 41, ELI: http://data.europa.eu/eli/dir/2011/85/oj). 
2  Council  Directive  (EU)  2024/1265  of  29 April  2024  amending  Directive  2011/85/EU  on  requirements  for 
budgetary 
ELI: 
http://data.europa.eu/eli/dir/2024/1265/oj). 
3 ‘Public accounting’ in this report refers to public accounting by the general government sector. 
4 Report from the Commission to the Council and the European Parliament, Towards implementing harmonised 
public  sector  accounting  standards  in  Member  States.  The  suitability  of  IPSAS  for  the  Member  States 
(COM/2013/0114 final). 

the  Member 

2024/1265, 

30.4.2024, 

States 

(OJ 

L, 

of 

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Taking due account of the benefits of EPSAS, which are relevant also to the deepening of the 
economic  and  monetary  union,  and  of  the  concerns  in  some  Member  States,  in  2015  the 
Commission  (Eurostat)  initially  took  a  progressive  and  voluntary  approach  in  order  first  to 
achieve  increased  fiscal  transparency  in  the  short  to  medium  term  and  then  to  ensure 
comparability in the medium to long term: 

•  Phase  1:  Increase  fiscal  transparency  in  the  Member  States  in  the  short  to  medium 
term  by  promoting  accruals  accounting  and,  in  parallel,  develop  the  EPSAS 
framework (covering governance, accounting principles and standards); 

•  Phase 2: Address comparability within and between Member States by implementing 

EPSAS. 

In  2019  and  2024,  the  Commission  (Eurostat)  issued  EPSAS  reports  (staff  working 
documents, or SWDs) outlining the progress made5. The current report is accompanied by an 
SWD providing further details. 

2. 

THE COMMISSION’S WORK ON MODERNISING PUBLIC ACCOUNTING IN THE EU 

In  the  last  10  years  the  Commission  (Eurostat)  has  taken  forward  work  on  EPSAS  in 
cooperation  with  Member  State  public  accounting  experts  representing  all  levels  of 
government,  as  well  as  with  other  key  EU  and  global  stakeholders.  In  Phase  1,  the 
Commission’s work on EPSAS includes  systematic cooperation with stakeholders, technical 
work  helping  to  prepare  potential  future  EPSAS  standards,  work  on  the  cost-benefit 
considerations  of  implementing  public  accrual  accounting  in  the  Member  States  and  the 
provision of technical and financial support for such accounting in the Member States. 

In September 2015, the Commission (Eurostat) set up the Working Group, later renamed the 
Expert  Group,  on  European  Public  Sector  Accounting  Standards6.  Its  overall  mission  is  to 
provide  the  Commission  (Eurostat)  with  advice  on  and  expertise  in  the  preparation  of 
harmonised  European  public  sector  accounting  and  general-purpose  financial  reporting 
standards on an accruals basis, for all levels of government. 

Systematic  communication  on  EPSAS  has  taken  place  with  key  stakeholders  such  as 
policymakers, governments, auditors, accountancy experts and academia. Beyond the Expert 
Group  on  EPSAS,  the  Commission  (Eurostat)  has  contributed  to  public  accounting  projects 
and meetings of the Organisation for Economic Co-operation and Development (OECD), the 
IPSAS  Board,  the  World  Bank  and  the  International  Monetary  Fund  (IMF).  Particular 
attention  has  been  paid  to  communication  with  all  levels  of  government  in  Member  States, 
including state and local government representatives. 

In  terms  of  the  technical  work  contributing  to  EPSAS,  the  issue  of  governance  for  future 
EPSAS  was  identified  as  a  priority  for  follow-up  after  the  conference  held  to  discuss  the 
development  of  EPSAS  in  Brussels  in  May  2013.  The  Commission  (Eurostat)  collected  the 
views  of  a  wide  range  of  stakeholders  in  a  public  consultation7  and  later  in  a  dedicated 
subgroup  of  the  expert  group.  Taking  into  account  the  information  collected,  key  EPSAS 

5 2019 EPSAS report and 2024 EPSAS report. 
6 Expert Group on European Public Sector Accounting Standards (E02989), hereinafter referred to as the ‘Expert 
Group on EPSAS’. It was called the ‘Working Group on EPSAS’ until spring 2021. 
7 Public consultation – Assessment of the suitability of the International Public Sector Accounting Standards  
for the Member States. 

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governance  principles,  objectives  and  users  of  General  Purpose  Financial  Reports  under 
EPSAS were laid down8. 

In  order  to  improve  fiscal  transparency,  as  a  first  step,  by  encouraging  public  accrual 
accounting  reforms  in  the  Member  States,  the  Commission  (Eurostat)  drew  up  guidance  on 
first-time implementation (FTI) of accruals-based financial statements9. The FTI guidance is 
not  meant  to  implement  EPSAS  as  such,  but  rather  to  support  improvements  to  fiscal 
transparency  in  the  short  to  medium  term  while  preparing  the  ground  for  EPSAS  to  be 
implemented at a later point in time. 

The Commission  (Eurostat), together  with  representatives of the Member States, prepared  a 
draft  conceptual  framework  (CF)  for  financial  accounting  and  reporting  under  future 
EPSAS10.  The  EPSAS  draft  CF  provides  a  set  of  concepts  and  definitions  for  the 
development, adoption and publication of EPSAS and offers guidance on the preparation and 
presentation of financial accounting information by sector entities under the EPSAS basis of 
accounting.  The  conceptual  framework  may  also  help  users  to  interpret  the  financial 
information  presented  by  public  sector  entities.  A  potential  set  of  future  EU  financial 
accounting  and  reporting  standards,  in  conjunction  with  the  conceptual  framework,  would 
provide the necessary concepts and operational measures derived from those concepts for the 
financial  statements  to  provide  a  true  and  fair  view  of  the  financial  position,  financial 
performance  and  cash  flows  of  public  sector  reporting  entities  under  the  accruals  basis  of 
accounting. 

A potential structure of future EPSAS standards has been developed. It covers the structure of 
the set of standards and the structure within future individual standards. The set covers eight 
accounting  areas  that  could  provisionally  be  divided  into  13  potential  EPSAS  standards. 
Furthermore,  the  proposed  structure  within  future  individual  EPSAS  standards  has  been 
simplified, taking into account the accounting traditions in individual Member States. 

From  2019  to  2021,  a  screening  of  IPSAS  standards  was  performed11.  The  purpose  of  the 
screening  reports  was  to  assess  the  consistency  of  individual  IPSAS  standards  with  the 
EPSAS draft CF and the principle of the European public good, so as to provide information 
for  the  setting  of  future  EPSAS  standards.  The  analysis  takes  account  of  the  IPSAS 
authoritative  text,  along  with  non-authoritative  guidance  where  appropriate,  to  determine 
whether the criteria of the EPSAS draft framework are met. 

Another source of information for the setting of potential future EPSAS standards is EPSAS 
issue  papers  containing  technical  analyses  of  public  accounting  topics.  The  issue  papers12 
provide  clarity  on  complex  accounting  issues,  focusing  on  technical  and  practical 
implementation  challenges.  This  work  has  also  placed  special  emphasis  on  ‘EPSAS 
flexibility’,  i.e.  the  possibility  of  reducing  the  reporting  burden  and  complexity  of  the 
standards  for  smaller  and  less  risky  public  entities.  The  EPSAS  issue  papers  also  support 
Member  States  in  their  accounting  reforms  by  considering  public  accounting  best  practices 
from selected Member States and by helping to share them throughout the EU. 

The  European  Commission’s  own  accounting  systems,  like  those  of  several  other 
international  organisations,  are  accruals-based  and  inspired  by  IPSAS.  Following  the  global 

8 Cell on principles underlying EPSAS governance – Final report to the working group of 7 April 2017. 
9 Guidance for the first time implementation of accrual accounting. 
10 Draft EPSAS conceptual framework (revised in February 2024). 
11 EPSAS screening reports on IPSAS. 
12 EPSAS issue papers covering topics relevant to public accounting. 

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trend and as a result of the cooperation between Member States facilitated by the Commission 
(Eurostat) under Phase 1 of the EPSAS project, extensive voluntary modernisation of public 
accounting systems across many Member States has taken place in the last decade. 

The  Commission  (Eurostat)  commissioned  three  studies  of  cost-benefit  considerations  for 
public  accruals  accounting  reform.  Two  studies  regularly  updated  the  estimations  of 
accounting  maturity  scores  of  governments  and  associated  EPSAS  implementation  costs, 
which had initially been published in 2014 (see Section 3 below). In relation to the benefits of 
public  accrual  accounting  in  crisis  situations,  such  as  during  COVID-19,  the  Commission 
(Eurostat)  commissioned  a  paper  that  examined  the  link  between  public  accounting  and  the 
wide range of important response measures put in place by many EU Member States13. 

Smart,  sustainable  and  socially  responsible  reforms  help  increase  the  resilience  of  the 
economies  and societies  of the EU. The Commission  has provided significant  technical  and 
financial support for Member States’ government accounting reforms. As part of its technical 
support, the Commission (Eurostat) has facilitated the sharing of best practices and initiated 
discussions on innovative approaches to public accounting. It has discussed the benefits and 
challenges  of  accrual  accounting  reforms  with  government  accounting  experts  and 
encouraged the sharing of experience and expertise between Member States. Member States 
have  expressed  particular  interest  in  innovation  related  to  accounting  systems  and  the 
implementation  of  international  standards.  A  number  of  Member  States’  public  accounting 
reform  projects  have  received  EU  financial  support  under  Eurostat  grants,  the  Technical 
Support Instrument (TSI) and the Recovery and Resilience Facility (RRF). 

The  work  done  under  Phase  1  of  the  EPSAS  project  supports  the  Commission’s  efforts  to 
strengthen administrative capacities in the Member States for greater impact. Despite a wide 
range of institutional set-ups and legal traditions, Member States’ public administrations share 
a  set  of  values  and  tasks  and  a  common  understanding  of  good  administration,  forming  a 
European  Administrative  Space.  Through  the  ComPAct14,  the  Commission  aims  to  enhance 
the European Administrative Space by promoting these principles and increasing its support 
for  the  administrative  modernisation  of  the  Member  States.  A  common  set  of  overarching 
principles for the quality of public administration has been established including  ‘sound and 
sustainable  public  finances,  underpinned  by  integrated  and  comprehensive  accruals-based 
public accounting systems’. 

3. 

ACHIEVEMENTS  AND  PLANS  OF  MEMBER  STATES  IN  DEVELOPING  THEIR  PUBLIC 
ACCOUNTING 

In  2025  most  Member  States  have  already  implemented  accrual  accounting  in  line  with 
national standards across the general government sector or are in the process of doing so. In 
the  absence  of  EPSAS,  all  reforming  countries  used  or  plan  to  use  IPSAS  as  a  basis  for 
developing their own standards. Table 1 presents the Member States in three groups according 
to  accounting  maturity.  Countries  with  an  accounting  maturity  (an  accrual  accounting 

13 Government accounting, EPSAS and supporting the COVID-19 response. 
14 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions, Enhancing the European Administrative Space (ComPAct), 
COM(2023) 667 final of 25.10.2023. 

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progress  score  in  relation  to  IPSAS)  of  70%  or  more  are  deemed  to  apply  accrual 
accounting15. 

15  More  specifically,  countries  with  an  accounting  maturity  of  70%  or  more  are  deemed  to  have  in  place 
integrated, comprehensive and nationally harmonised accrual financial accounting systems. 

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Table 1. Accounting maturity (AM) for the general government sector in 2025 

High: AM ≥ 70% 

Medium: 70% > AM ≥ 40% 

Low: AM < 40% 

Belgium, Bulgaria, Czechia, 
Denmark, Estonia, Ireland, 
Spain, France, Latvia, 
Lithuania, Austria, Slovakia, 
Finland and Sweden 

Source: PwC 2025 study16 

Croatia, Luxembourg, Hungary, 
Netherlands, Poland, Portugal, 
Romania and Slovenia 

Germany, Greece, Italy, Cyprus 
and Malta 

However, accounting maturity differed significantly between general government subsectors 
in  many  countries.  In  particular,  local  governments  more  often  accounted  on  an  accruals 
basis,  whereas  social  security  funds  relied  more  on  cash  accounting.  In  2025  EU  average 
maturity scores for subsectors are as follows: 

•  central government: 66% 
•  state government: 68% 
• 
local government: 73% 
•  social security funds: 59%. 

IPSAS  appear  to  be  a  common  source  of  inspiration  in  domestic  accounting  standards  for 
more than three quarters (21 out of 27) of Member States at central government level. More 
than half (14) of the Member States use IPSAS as a primary basis for developing their own 
government  accounting  standards.  On  the  harmonisation  of  accounting  policies  in  Member 
States, more than half (14) of the Member States apply broadly similar accounting principles 
to all general government subsectors. 

Due  to  the  expected  benefits  of  public  accruals  accounting  and  the  direction  and  support 
provided under the EPSAS  initiative, the use of  such accounting has increased significantly 
since  the  2013  IPSAS  report.  The  EU  accounting  maturity  averages  for  the  central 
government subsector have increased from 57% to 66% since that report. A similar trend has 
been  observed  in  other  general  government  subsectors.  At  subsector  level,  the  greatest 
improvements  (by  more  than  20  percentage  points)  were  observed  in  Greece  (local  level), 
Spain (state level), Croatia (central and local level), Cyprus (central level), Latvia (local level 
and social security), Luxembourg (social security), and Austria (state and local level). 

The  Member  States  undertaking  reforms  acknowledge  the  benefits  of  public  accrual 
accounting. Between 2014 and 2018, Eurostat co-financed 13 projects paving the way for or 
directly contributing to public sector accruals modernisation efforts in eight Member States17. 
With  support  for  over  18  reforms  across  nine  Member  States,  the  Technical  Support 
Instrument (TSI)18 has supported, and continues to support, Member States’ administrations in 
increasing  capacity,  implementing  technical  solutions  and  setting  national  IPSAS-compliant 
accounting standards in order to introduce and expand the use of accrual accounting. Support 
from the TSI has  also facilitated more than 10 study visits to other Member States. Support 
has been provided to Ireland, Greece, Croatia, Italy, Cyprus, Luxembourg, Malta, Poland and 
Portugal.  In  Greece,  Italy  and  Portugal  the  reforms  are  aligned  with  commitments  made  in 
their national recovery and resilience plans under the RRF. By also benefiting from the TSI, 

16 Updated accounting maturities of EU governments and EPSAS implementation cost, see table 3 on page 12. 
The figures for the general government sector are calculated as weighted averages of the subsectors’ figures. 
17 Germany (Hesse), Spain (Cantabria), Italy, Cyprus, Hungary, Malta, Austria (Burgenland, Salzburg and Upper 
Austria) and Portugal. 
18  Initially  the  Structural  Reform  Support  Programme  (SRSP),  followed  by  the  Technical  Support  Instrument 
(TSI) from 2021. 

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Ireland has embarked on a public accounting reform focusing on central government, whereas 
Austria  has  completed  its  reform  by  implementing  accruals-based  accounting  at  state  and 
local  government  levels.  Some  countries  with  already  high  accounting  maturity,  such  as 
Lithuania, have further refined alignment of their public accounting with IPSAS. 

Germany and the Netherlands currently have no plans to move towards accruals across their 
general government subsectors. In Germany, although there is no nationwide commitment to 
broad  public  accruals-based  reform,  individual  improvements  of  the  accounting  system  are 
being made at federal level (e.g. digitalisation of accounting processes and completion of an 
asset  register).  Two  German  federal  states,  Hessen  and  Hamburg,  have  in  place  advanced 
accruals-based public accounting systems. Furthermore, in 2025 accruals-based accounting is 
mandatory for local  governments  in  11 of  the  13  area states of Germany (excluding Berlin, 
Bremen  and  Hamburg  as  these  states  do  not  have  a  municipal  level).  Implementation  of 
accrual accounting also varies in the Netherlands, which continues with cash accounting for 
most  of  its  central  government  entities,  whereas  its  social  security  funds  and  most  local 
governments use accrual accounting. 

Introducing  accrual  accounting  is  a  lengthy  process,  requiring  a  comprehensive  approach, 
extensive  capacity  building  and  knowledge  development  across  public  administration.  In 
Ireland, Greece, Italy and Luxembourg, successive multiannual TSI support has successfully 
delivered tangible outputs that contributed to the accounting reforms in these Member States. 
Experience has shown that progress also depends heavily on the commitment and availability 
of  the  participating  public  entities.  Best  practices  from  EU  Member  States  show  that  full 
implementation takes several years, meaning that the benefits are not immediately visible. 

By  producing  transparent  and  comparable  accruals-based  financial  statements,  governments 
will reflect the long-term impact of their decisions and can be held accountable for the good 
use of public funds to the citizens who democratically elect them and other stakeholders, such 
as fund providers. The benefits  obtained from  the accounting reforms  in  the Member States 
are difficult to quantify as they affect multiple areas, but significant additional benefits can be 
expected  if  governments  go  beyond  what  is  necessary  to  comply  with  the  accounting  rules. 
Member States having implemented accrual  accounting reforms  have reported that the main 
driver for the reform was the need to build up management information systems that enable 
sound and well-informed decision-making. Implementing comprehensive high-quality accrual 
accounting practices is a necessary precondition for this. Robust accrual accounting data can 
be  used  to  develop  results-based  management  practices,  cost  accounting,  asset  management 
programmes  and  other  key  performance  indicators  that  enable  the  costs  of  policies  and 
programmes to be assessed and the outcomes to be evaluated against policy objectives. 

The  feedback  received  from  governments  on  the  benefits  derived  from  these  wider  finance 
reforms is very positive. Governments having conducted an accounting modernisation project 
have, in a number of cases, also taken the opportunity to invest in modern IT/ERP19 systems 
and streamline their internal processes, resulting in a positive impact on the efficiency – and 
hence the ongoing cost – of their operations. 

There is growing (but not yet universal) acknowledgement of the need for accruals accounting 
for  government  within  the  EU  and  its  Member  States,  although  there  is  currently  no 
harmonised  approach.  Accrual  accounting  reforms  (often  implemented  as  part  of  wider 
financial reform) are ongoing in Ireland, Greece, Croatia, Italy, Cyprus, Luxembourg, Poland, 
Portugal and also in two federal states in Germany, whereas the financial reporting process in 

19 Enterprise resource planning. 

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most  Member  States  is  continuously  being  improved.  Countries  continue  to  seek  greater 
efficiency and automation of the financial reporting process and better information as an input 
for better decision-making and alignment with the  development of IPSAS. According to the 
plans of the Member States, the EU average accounting maturity for the central government 
subsector  is  expected  to  further  improve  from  66%  in  2025  to  78%  in  2030.  The  most 
significant  change  is  expected  in  Greece  (+ 67  percentage  points  –  p.p.),  Malta  (+ 60  p.p.), 
Italy  (+ 50  p.p.),  Cyprus  (+ 48  p.p.)  and  Luxembourg  (+ 45  p.p.),  reflecting  the  accounting 
reforms that are currently under way. 

Table 2. Planned accounting maturity for general government sector in 2030 

High: AM ≥ 70% 

Medium: 70% > AM ≥ 40% 

Low: AM < 40% 

Croatia, Luxembourg, Hungary 
Netherlands, Poland, Romania 
and Slovenia 

Germany 

Belgium, Bulgaria, Czechia, 
Denmark, Estonia, Ireland, 
Greece, Spain, France, Italy, 
Cyprus, Latvia, Lithuania, 
Malta, Austria, Portugal, 
Slovakia, Finland and Sweden 

Source: PwC 2025 study 

EU developments in recent years have been in line with the global trend. More than half (95 
out  of  169)  of  the  jurisdictions  included  in  an  IFAC,  CIPFA,  IPSASB  International  Public 
Sector  Financial  Accountability  Index:  2025  Status  Report20  declared  that  their  public 
accounting  will  be  accruals-based  by  2030.  The  equivalent  share  in  the  2024  Index  was 
around one third (53 out of 169). 

4. 

SUITABILITY OF IPSAS FOR THE MEMBER STATES AND THEIR POTENTIAL USE FOR 
EPSAS 

This chapter assesses the suitability of IPSAS as a common public accounting framework in 
the EU21 and their potential use for developing EPSAS. 

The 2013 IPSAS report was based on a broad public consultation. 38.2% of its respondents 
agreed  that  IPSAS  would  be  suitable  as  an  accounting  standard  for  the  European  Union, 
30.9%  partially  agreed,  while  27.9%  disagreed22.  The  2013  IPSAS  report  concluded  that, 
while IPSAS would make a suitable reference framework for developing EPSAS, there were 
concerns about its governance and its conceptual and technical aspects. The concerns included 
practical  limits  to  harmonisation,  the  completeness  of  the  standards,  the  stability  of  the 
accounting framework and the insufficiency of resources for the governance framework. 

Over  the  12-year  period  since  the  2013  IPSAS  report,  a  new  IPSAS  governance  structure, 
including  strengthened  independent  oversight,  has  been  put  in  place.  In  2015  the  Public 

20 International Public Sector Financial Accountability Index, 2025 status report, IFAC (International Federation 
of Accountants), CIPFA (Chartered Institute of Public Finance and Accountancy) and IPSASB (International 
Public Sector Accounting Standards Board), September 2025. 
21 This aspect is being stressed because there might be overlap between individual Member States’ perceptions of 
the  suitability  of  IPSAS  for  them  nationally  and  the  suitability  of  IPSAS  if  they  formed  the  basis  for  a 
harmonised EPSAS approach. 
22 Public consultation – Assessment of the suitability of the International Public Sector Accounting Standards for 
the Member States. 

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Interest Committee (PIC) was  set up to provide assurance that the IPSAS Board’s standard-
setting  activities  are  based  on  the  public  interest.  Furthermore,  the  Consultative  Advisory 
Group (CAG), set up in 2016, provides a forum for the IPSAS Board to consult and receive 
advice  from  representatives  of  public  sector  organisations,  or  from  individuals,  who  are 
interested in or affected by its work. Since they were set up, the PIC and the CAG have been 
integral  to  the  IPSAS  Board’s  governance  and  oversight  processes  and  standard-setting 
activities. Two of the 18 IPSAS Board members are currently from EU Member States, with 
Eurostat  and  DG BUDG  participating  as  observers.  The  Accounting  Officer  of  the 
Commission is a CAG member. 

During  that  12-year  period,  IPSAS  standards  have  undergone  significant  changes.  The 
standards are now more comprehensive, having increased from 31 effective standards in 2013 
to  40  standards  in  2025,  with  the  proportion  of  public  sector-specific  standards  rising  from 
19%  in  2013  to  30%  in  2025.  Standards  dealing  with  specific  public  sector  issues  include 
IPSAS 42, Social Benefits; IPSAS 47, Revenue;  and IPSAS 48, Transfer Expenses; but also 
IPSAS 19, Provisions, Contingent Liabilities and Contingent Assets. IPSAS now cover all the 
key issues that should be reflected in financial statements of public entities and are considered 
by stakeholders to be ‘stable and complete’. 

The screening of IPSAS standards (see Chapter 2) is another exercise reflecting the suitability 
of IPSAS for the EU. Overall, all the IPSAS standards screened have been found to be in line 
with  the  draft  EPSAS  CF  and  the  principle  of  the  European  public  good.  The  need  for 
additional  guidance  has  been  highlighted  in  several  accounting  areas.  In  addition,  the 
application of IPSAS among Member States was surveyed in 2024. The study highlights that 
while standards are quite comprehensive in a number of accounting areas, there are still gaps. 

In 2024 Eurostat conducted a survey on the suitability of IPSAS for Member States and their 
potential  use  for  developing  EPSAS  among  the members  of  the  EPSAS  Expert  Group.  The 
three questions addressed the suitability of IPSAS as a reporting framework, the governance 
of  that  framework  for  the  Member  States  and  the  suitability  of  IPSAS  as  a  reference 
framework for developing EPSAS. While some concerns listed in the 2013 IPSAS report have 
remained,  they  have  diminished  over  time,  and  the  respondents’  views  indicate  that  the 
suitability of IPSAS as a reporting framework for Member States and the governance of that 
framework have in the meantime significantly improved. The vast majority of Member States 
highlighted  the  suitability  of  IPSAS  standards  and  their  governance  model.  The  need  to 
design a fiscal management model which will integrate ESA reporting and methodology and 
the  related  fiscal  instruments  with  IPSAS/EPSAS  reporting  was  highlighted.  Other  major 
concerns raised included the cost and complexity of implementation and the need for detailed 
guidance and differential reporting. 

Table 3. Suitability of IPSAS for Member States and their potential use for developing EPSAS 

IPSAS are a suitable reporting framework 
for Member States 

IPSAS governance makes it suitable for 
Member States 

IPSAS are a suitable reference framework 
for developing EPSAS 

Yes 

46% 

27% 

66% 

Source: 2024 survey on the suitability of IPSAS 

Partly 

42% 

58% 

19% 

No 

12% 

15% 

15% 

Member States believed that IPSAS, as a reference framework, will enhance standardisation 
and comparability of public financial reporting in the EU. There was, however, concern about 
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the suitability of the option of using fair value as a basis for measurement in the public sector 
in some circumstances. 

Member States acknowledged that while there is strong public sector expertise embedded in 
the governance system of IPSAS and a thorough, independent and transparent due process is 
in  place,  there  was  a  desire  for  greater  European  involvement  in  the  IPSAS  governance 
system.  There  was  also  concern  as  to  whether,  from  the  point  of  view  of  democratic 
legitimacy, a board supported by a private body could be the standard setter for the EU. 

Member  States  thought  that  using  IPSAS  as  a  reference  framework  for  developing  EPSAS 
would allow EPSAS to be implemented cost-effectively. 

Member  States  had  two  different  points  of  view  on  the  suitability  of  IPSAS  for  EPSAS 
purposes.  One  perspective  was  that  IPSAS  would  be  suitable  and  that  an  endorsement 
mechanism – like the one in place for private sector accounting standards in the EU – would 
be  sufficient.  The  other  perspective  focused  on  a  separate  EPSAS  standard-setting  process, 
albeit  based  on  IPSAS,  highlighting  the  need  for  robust  technical  capacity.  Member  States 
also  highlighted  the  need  for  political  support  and  noted  that  legislative  changes  would  be 
necessary at Member State level. 

5. 

WAY FORWARD FOR PUBLIC ACCOUNTING IN THE EU 

Given  the  importance  of  robust  and  transparent  public  accounting  systems  and  Member 
States’ continued interest in contributing to EU-level discussions on public accounting, there 
is high demand to coordinate efforts to modernise national public accounting systems on the 
basis of national accruals-based standards. 

The  increased  use  of  accruals-based  public  accounting  in  the  EU  during  Phase  1  of  the 
EPSAS project has generated significant momentum for reform and demonstrated the value of 
discussing  public  accounting  developments  and  sharing  best  practices.  This  benefits  both 
Member  States  already  using  accruals-based  approaches  and  those  working  on  accounting 
reforms, as they benefit from past experience. At the same time, it encourages the voluntary 
convergence of approaches across the EU. 

Most (14) Member States have already implemented accrual accounting in line with national 
standards across the general government sector. Five are set to do so by 2030. Eight Member 
States do not plan to implement accrual accounting across their general government sector by 
2030,  with  two  of  them  not  acknowledging  the  benefits  of  doing  so.  The  work  carried  out 
under  the  Expert  Group  on  EPSAS  and  the  reform  of  the  EU’s  economic  governance 
framework  has  revealed  a  lack  of  consensus  among  Member  States  on  making  harmonised 
accruals-based public accounting compulsory in the EU. 

Although some concerns set out in the 2013 IPSAS report still remain, they have diminished 
over  time.  The  suitability  of  IPSAS  as  a  reporting  framework  for  Member  States  and  the 
governance  of that framework  have significantly improved since the report. The other main 
concerns  about  IPSAS  raised  by  some  Member  States  are  the  cost  and  complexity  of 
implementation and the need for detailed guidance. 

In the light of the progress made, the EPSAS initiative will continue in Phase 1, focusing on 
encouraging  and  supporting  national  modernisation  efforts  to  increase  transparency  in  the 
general government sector. These activities will involve among others: 

1)  The Commission will provide technical support for the Member States’ modernisation 
efforts, by identifying  implementation challenges and developing common solutions, 

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promoting  best  practices  and  sharing  experiences  of  public  accounting  between  the 
Member States. 

2)  Public accrual accounting reforms will remain eligible for support under the Technical 
Support  Instrument  until  2027.  Future  EU  financial  and  technical  support  will  be 
decided on under the next EU budget23. 

3)  There will be systematic communication with key stakeholders such as policymakers, 
governments,  auditors,  accountancy  experts  and  academia.  Cooperation  will  be 
maintained  with  the  IPSAS  Board  and  other  international  organisations  such  as  the 
OECD, the World Bank and the IMF. 

4)  Convergence of approaches in EU Member States will be encouraged by following the 

EPSAS draft conceptual framework on a voluntary basis. 

5)  The  next  report  on  public  accounting  in  the  EU  will  be  drawn  up  in  2029-2030,  as 

required by the amended Budgetary Frameworks Directive. 

These  objectives  are  compatible  with  Commission  policies,  in  particular  on  enhancing  the 
European Administrative Space (ComPAct) and the objectives of the Budgetary Frameworks 
Directive. 

23 https://commission.europa.eu/strategy-and-policy/eu-budget/long-term-eu-budget/eu-budget-2028-2034_en. 

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