COMMISSION STAFF WORKING DOCUMENT accompanying the Report from the Commission to the Council and the European Parliament 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

   EUROPEAN COMMISSION  Brussels, 5.12.2025  SWD(2025) 396 final  COMMISSION STAFF WORKING DOCUMENT   accompanying the Report from the Commission to the Council and the European Parliament 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 {COM(2025) 746 final}  
 
 
TABLE OF CONTENTS 

1. 

Introduction ............................................................................................................................. 4 

2.  The Commission’s work on modernising public accounting in the EU ................................. 6 

2.1 

2.2 

2.3 

Cooperation with stakeholders ........................................................................................ 6 

Technical work helping to prepare potential future EPSAS standards ........................... 7 

Cost-benefit considerations of implementing accrual accounting in the Member States
10 

2.4 

Technical and financial support for accrual accounting in the Member States ............ 12 

Annex 2.1. List of EPSAS issue papers ........................................................................................ 15 

3.  Achievements and plans of Member States in implementing accruals-based accounting in the 
public sector .................................................................................................................................. 16 

3.1 

Current situation with regard to accrual accounting in Member States ........................ 16 

3.1.1. 

Introduction ........................................................................................................... 16 

3.1.2.  Methodological approach to determine Member States accounting maturities .... 17 

3.1.3. 

3.1.4. 

2025 accounting maturity ..................................................................................... 17 

2025 accounting practices ..................................................................................... 19 

3.2 

Changes to accrual accounting in Member States since 2013 ...................................... 20 

3.2.1. 

3.2.2. 

Overall picture ...................................................................................................... 20 

Past reforms and other key developments at Member State level ........................ 20 

3.3 

Plans of Member States with regard to accrual accounting .......................................... 26 

3.3.1. 

3.3.2. 

3.3.3. 

Overall picture for 2030 projected accounting maturity ....................................... 26 

Planned reforms and other key expected developments at Member State level ... 28 

Global trend towards accrual accounting .............................................................. 32 

3.4 

Lessons learnt and (expected) benefits from reforms ................................................... 32 

3.4.1. 

3.4.2. 

Lessons learned from accrual accounting reforms and tips for implementation .. 33 

(Expected) benefits from accrual accounting reforms .......................................... 36 

Annex 3.1. 2025 accounting maturity by country and government sector ............................... 41 

Annex 3.2. 2014 accounting maturity by country and government sector ............................... 42 

Annex 3.3. Evolution of the accounting maturity by country and government sector between 
2014 and 2025 ........................................................................................................................... 43 

Annex 3.4. 2030 projected accounting maturity by country and government sector ............... 44 

4.  Suitability of IPSAS for the Member States and their potential use for EPSAS .................. 45 

4.1 

Evolution of IPSAS since 2013 .................................................................................... 45 

4.1.1. 

4.1.2. 

Governance and Oversight .................................................................................... 45 

IPSAS Standards ................................................................................................... 46 

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4.2 

4.3 

Application of IPSAS by EU Member States ............................................................... 48 

Screening of IPSAS standards on their suitability for developing EPSAS .................. 57 

4.4 
Survey  results  on  suitability  of  IPSAS  for  Member  States  and  their  potential  use  for 
developing EPSAS .................................................................................................................... 68 

4.4.1. 

4.4.2. 

4.4.3. 

4.4.4. 

4.4.5. 

4.4.6. 

Introduction ........................................................................................................... 68 

Survey design and implementation ....................................................................... 68 

IPSAS Standards (Q1) .......................................................................................... 69 

IPSASB Governance (Q2) .................................................................................... 71 

Suitability of IPSAS as a reference framework for developing EPSAS (Q3) ...... 72 

Complementary context on issues raised in the survey ........................................ 73 

Annex 4.1. List of IPSAS standards by degree of public sector guidance and effective date .. 76 

Annex 4.2. List of IPSAS standards issued after 2012 ............................................................. 78 

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1.   Introduction 

This staff working document (SWD) accompanies the report from the Commission to the Council 
and the European Parliament 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.  The  mentioned 
Commission  report  was  required  by  Article  16(1)(a)  of  Council  Directive  2011/85/EU  of  8 
November 2011 on requirements for budgetary frameworks of the Member States (the Budgetary 
Frameworks  Directive),  as  amended  by  Council  Directive  (EU)  2024/1265.  The  Directive  was 
amended as part of the reform of the EU’s economic governance framework. The objective of the 
reform was to make the framework simpler, more transparent and effective, with greater national 
ownership. The new framework supports Member States in achieving macroeconomic stability, 
growth and fiscal sustainability and encourages reforms and investments. Ultimately, it helps build 
a more resilient, fair, competitive, and secure EU economy for the benefit of citizens. 

The  work  on  European  Public  Sector  Accounting  Standards  (EPSAS)  originates  from  the 
Budgetary  Frameworks  Directive  which  requires  Member  States  to  “have  in  place  public 
accounting  systems  that  comprehensively  and  consistently  cover  all  subsectors  of  general 
government  and  that  contain  the  information  needed  to  generate  accrual  data  with  a  view  to 
preparing data based on the European System of National and Regional Accounts. Those public 
accounting systems by the general government shall be subject to internal control and independent 
audits”. The Directive does not directly require public accounting systems be on an accruals basis, 
only that they are able to generate accrual data. 

Responding  to  the  requirement  in  the  initial  Budgetary  Frameworks  Directive,  in  2013,  the 
Commission  published an assessment of the suitability of IPSAS  for the Member States  (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, 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 the EPSAS initiative. 

IPSAS 

IPSAS  are  a  set  of  international  accruals-based  standards  for  public  sector  accounting 
promulgated  by  the  International  Public  Sector  Accounting  Standards  Board  under  the 
auspices of the International Federation of Accountants (IFAC). IPSAS are used as guidance 
by many governments around the world to improve public sector financial reporting.  

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The Commission's own accounting rules for the EU Institutions and bodies are based on IPSAS 
and IPSAS are main reference in the guidance for public sector accounting standards in over 
half of EU Member States. Taking that into account, the Commission (Eurostat) closely co-
operates with the IPSAS Board and is represented as an observer in its meetings.  

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. 

Cash and accrual accounting 

Under cash accounting,  transactions and events  are recognised when  cash is  received or 
paid. Cash accounting measures the financial result for a certain period as the difference 
between cash receipts and cash payments. In contrast, under accrual accounting transactions 
are recognised when the underlying economic events occur, regardless of the timing of cash 
transfers, and are reported in the financial statements of the periods to which they relate.  

Financial reporting under accrual accounting provides a complete and reliable picture of the 
financial  position  and  performance  of  the  reporting  entity  in  the  reference  period.  The 
financial position is presented in the form of a balance sheet and financial performance in the 
form of an income statement or similar account. These, together with the cash-flow statements 
and  explanatory  notes  on  significant  events  and  transactions,  are  generally  perceived  as 
providing the minimum set of elements for general purpose financial reporting.  

In 2015, the Commission (Eurostat) decided that a progressive and voluntary approach would be 
followed initially in  order to  first  achieve increased fiscal  transparency in the short to  medium 
term, and then ensure comparability in the medium to the longer 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. 

The chapters of the SWD complement the information provided in the respective chapters of the 
Commission report.  

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2.  The Commission’s work on modernising public 

accounting in the EU 

2.1  Cooperation with stakeholders 

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)  contributed  to  public  accounting  projects  and  meetings  of  the 
Organisation for Economic Co-operation and Development (OECD), IPSAS Board, World Bank 
and the International Monetary Fund (IMF). Particular attention was devoted to communication 
with  all  government  levels  of  Member  States,  including  state  and  local  government 
representatives. 

An  EPSAS  Conference  was  held  29-30  May  2013  in  Brussels.  There  Mr  Algirdas  Šemeta, 
Commissioner for Taxation, Customs, Statistics, Audit and Anti-fraud, brought together high-level 
stakeholders and decision makers from public sector accounting, auditing, and statistics to discuss 
the future development of harmonised government accounting standards in Europe. 

Following the keynote speech of Herman Van Rompuy, President of the European Council, the 
conference  discussed  the  importance  of  developing  economic  governance  in  the  context  of  the 
current economic situation and the need for transparent and comparable fiscal data and underlying 
public accounts. It also covered key issues for accounting harmonisation in the EU and examples 
of the experience of some countries in modernising their public accounting and financial reporting. 
The conference concluded with a roundtable on lessons learned, best practices and the next steps 
to be taken. 

In 2015, the EPSAS Working Group (later ‘EPSAS Expert Group’) was set up. It has served as a 
forum for Member States to provide advice and expertise in the preparation of EPSAS, from all 
levels  of government.  The delegates to  the  expert group are primarily  public sector accounting 
standard-setters and those responsible for public accounting in the Member States. Observers from 
the European Central Bank (ECB), World Bank, European Court of Auditors, Accountancy Europe 
(ACE) and IPSAS Board also attend the meetings. The discussions within the expert group have 
focussed on developing the basis for future public sector standard-setting in Europe, including a 
draft  EPSAS  Conceptual  Framework  and  the  process  for  developing  standards  (including 
governance), and building up the evidence base for assessing the costs and benefits associated with 
a potential future legislative proposal on EPSAS. 

In parallel, the Commission (Eurostat) has participated in EPSAS related discussions in a broad 
manner, including with other EU institutions, national stakeholders in EU Member States, other 
international  organisations  (in  particular  the  IPSAS  Board  and  the  OECD)  and  the  academic 

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community. Strong emphasis has been placed on engaging with stakeholders across all levels of 
government in the Member States, attending a wide range of national events where EPSAS has 
been addressed. The Commission (Eurostat) has presented EPSAS in the European Parliament, in 
seminars with both the Members of the Committee on Budgetary Control (CONT) and the Council 
EFC Sub-Committee on Statistics of the Economic and Financial Committee (EFC-SCS).  

A workshop with the European Parliament CONT Committee1 informed Members of the European 
Parliament on the current state of the EPSAS initiative, the issues faced by the Member States and 
the possible role of the European Parliament in the way forward. Furthermore, in its resolution 
issued in June 20162, the European Parliament noted the ongoing efforts to enhance transparency 
and comparability of public accounts by developing EPSAS. 

The  EFC-SCS  held  two  dedicated  seminars  on  EPSAS  addressing  the  issues  raised  by  public 
accounting and statistical communities in the Member States. Further to this, in 2017, the ECOFIN 
Council took note of the work being done on EPSAS principles and standards and on supporting 
Member States' efforts to adapt and raise accounting maturity on a voluntary basis and underlined 
that work on EPSAS should also be informed by a detailed impact assessment. It also underlined 
that  it  should  provide  a  comprehensive  account  of  both  positive  and  negative  impacts.  The 
ECOFIN Council conclusions in 2018 took note of the ongoing technical work on developing the 
EPSAS framework and standards, alongside support measures to increase public sector accounting 
maturity in EU Member States, as well as the emphasis being given to the engagement of local 
and regional authorities in EPSAS discussions, and of the ongoing work on the potential impact 
of EPSAS. 

2.2  Technical work helping to prepare potential future EPSAS 

standards 

Prior to the setting up of the EPSAS Working Group, two task forces3 were created with specific 
mandates. The EPSAS governance task force was set up to exchange ideas with the authorities of 
the  EU  Member  States  on  possible  future  governance  arrangements  and  the  underlying  key 
principles of EPSAS. The task force assisted the Commission (Eurostat) to identify the key issues 
for EPSAS governance, discuss how to balance those issues, and thereby assisted the Commission 
(Eurostat) to develop an EPSAS governance structure model. 

The  EPSAS  standards task  force  was  created  to  exchange  ideas  with  the  authorities  of  the  EU 
Member  States  on  technical  aspects  of  the  standards.  The  task  force  assisted  the  Commission 
(Eurostat) to: 

1https://www.europarl.europa.eu/committees/en/epsas-how-to-achieve-more-reliable-and-t/product-
details/20151001CHE00071 
2 https://www.europarl.europa.eu/doceo/document/A-8-2016-0172_EN.html 
3 Updated accounting maturities of EU governments and EPSAS implementation cost (2025)  

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•  analyse  the  most  contentious  IPSAS  standards  and  address  the  concrete  difficulties 
encountered with some of the IPSAS standards in practice, and ways to overcome them; 
•  analyse the possibility to reduce burden, and complexity of the standards for small public 

entities; 

•  discuss the implementation of standards via a progressive batched approach. 

During  the  first  meeting  of  the  EPSAS  Working  Group,  held  in  September  2015,  the  EPSAS 
project was taken forward by individual topics. These were addressed by subgroups, before being 
discussed with the Working Group. Three small subgroups (‘cells’) consisting of country experts 
provided  technical  input  to  the  EPSAS  initiative.  The  work  of  the  cell  on  First  Time 
Implementation  resulted  in  preparation  of  a  Guidance  for  the  First  Time  Implementation  of 
Accrual Accounting,4 which addresses issues faced by Member States when starting to prepare 
opening  balance  sheets  on  a  full  accruals  basis  or  for  those  who  would  like  to  improve  their 
accruals-based  systems.  The  results  of  the  work  of  two  other  cells,  on  Principles  underlying 
EPSAS Governance and on Principles related to EPSAS Standards, were used to develop the draft 
EPSAS Conceptual Framework.5  

In cooperation with Member State experts, significant progress has been achieved in drafting the 
EPSAS Conceptual Framework. The draft conceptual framework consists of a set of concepts and 
definitions for the development of EPSAS and guidance for the preparation and the presentation 
of financial accounting information by public sector entities under EPSAS. In determining which 
public sector entities should provide General Purpose Financial Reports under the EPSAS basis of 
accounting, a distinction is made between the EPSAS reporting boundary and the reporting entity 
within the reporting boundary. As for the EPSAS reporting boundary, the EPSAS CF and standards 
would apply to all public sector entities, be it single or group reporting entities, that are part of the 
public sector (ESA 2010), except for national Central Banks and for entities which fall within the 
scope of Annex I and Annex II of the Accounting Directive (2013/34/EU), which report on the 
basis  of  generally  accepted  financial  accounting  standards.  Member  States  might  also  allow 
exceptions  for  the  non-profit  institutions  that  are  required  by  national  legislation  to  apply  the 
principles of the Accounting Directive. Simplified and reduced requirements for smaller and less 
risky  entities  shall  be  specified  at  the  level  of  EPSAS  standards.  Within  the  EPSAS  reporting 
boundary, the Member States may define reporting entities in their own Member States taking into 
account  the  specific  administrative  arrangements  and  circumstances  in  their  country.  A  public 
sector reporting entity may have a separate legal identity or may be, for example, an organization, 
administrative  arrangement,  program  or  identifiable  area  of  activity  without  a  separate  legal 
identity. Member States determine their reporting entities. The requirements for the consolidation 
of other public sector entities into reporting entities’ financial statements should be provided in an 
EPSAS consolidation standard. 

4 Guidance for the First Time Implementation of Accrual Accounting  
5 Draft EPSAS Conceptual Framework  

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A possible future EPSAS standard setter would need to draw on different sources of information 
for  developing  the  EPSAS  Framework  (which  would  consist  of  conceptual  framework,  set  of 
accounting standards and guidance). To prepare for the possible development of future EPSAS 
standards, the EPSAS Expert Group has held discussions on the most challenging public sector 
accounting issues,  based on a series of 22 EPSAS  issue papers6 addressing e.g. the accounting 
treatment of social benefits, grants and consolidation, see Annex 2.1. 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. 

Among the main sources of information for developing the future EPSAS Framework are also the 
EPSAS  screening  reports  assessing  IPSAS  standards  against  the  draft  EPSAS  Conceptual 
Framework.  The  screening  of  IPSAS  standards  has  been  completed.  Most  of  the  screened  37 
IPSAS standards raised no major conceptual issues and were assessed as being compatible with 
the draft EPSAS Conceptual Framework. However, the screening revealed that, in order to achieve 
the European objectives, in  some cases options could  be narrowed in  EPSAS  and guidance on 
specific topics could be provided in future EPSAS standards.  

A  potential  future  structure  of  EPSAS  standards  was  developed  (see  Table  1).  It  includes  the 
structure of the set of standards and the structure within future individual standards. The set covers 
eight accounting areas that could be provisionally divided into 13 potential EPSAS standards. Each 
EPSAS standard corresponds to a cluster of IPSAS standards that are naturally related in terms of 
the type of transactions they cover. 

6 EPSAS issue papers  

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Table 1. The potential future structure of EPSAS standards 

# 

1 

2 

3 

4 

5 

EPSAS standard 

Related IPSAS standards 

Financial statements 

General principles 

Revenue 

Expenses 

Assets 

1, 2, 22, 24, OCI 

3, 4, 14, 18, 20, 44 (discontinued operations), 46 

47 

19 (collective and individual services), 48 

5.1 

Fixed assets 

5, 12, 16, 21, 26, 27, 31, 44 (non-current assets held 
for sale), 45 (replaces 17) 

5.2 

5.3 

5.4 

6 

6.1 

6.2 

6.3 

7 

8 

and 
Leases 
arrangements 
Inventories 

service 

concession 

32, 43 

Contingent assets 

Liabilities 

Provisions and contingent liabilities 

Employee benefits 

Social benefits 

12 

19 

19 

39 

42 

Financial instruments 

28, 30, 41 

Consolidation 

34, 35, 36, 37, 38, 40 

The structure within future individual EPSAS standards includes five components: Objective and 
Scope, Definitions, Body of the standard, Disclosures and Guidance. 

2.3  Cost-benefit considerations of implementing accrual accounting in 

the Member States  

As  regards  cost-benefit  considerations,  at  EU  level  long-term  benefits  and  savings  would  be 
achieved  through  harmonised  accruals-based  accounting  systems,  whereas  the  costs  of  such 
structural reforms are only temporary. Regular modernisation efforts, which are likely to happen 
in Member States anyway on related systems, such as asset registers and IT systems, represent the 
bulk  of  potential  reform  costs  and  would  render  the  costs  related  specifically  to  the  accrual 
accounting implementation only incremental. 

In  total  the  Commission  (Eurostat)  has  commissioned  five  studies  relating  to  cost-benefits 
considerations.  In  2014  the  collection  of  information  related  to  the  potential  impact,  including 
costs,  of  implementing  accrual  accounting  in  the  public  sector  and  technical  analysis  of  the 
suitability of individual IPSAS standards has been carried out.7 The study showed that a significant 

7 Collection of information related to the potential impact of implementing accrual accounting in the public sector and 
technical analysis of the suitability of individual IPSAS standards  

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part of the expected total costs depends largely on the need to modernise financial IT systems, 
which  some  Member  States  may  face  to  update  irrespective  of  accrual  accounting.  The  study 
suggested a cost for the total implementation of binding EPSAS standards ranging from EUR 1.2 
billion to EUR 6.9 billion for the EU, depending notably on the need for new IT systems. Two 
studies (2020 and 20258) provided an update to the accounting maturity scores of governments 
within the EU and associated estimations of EPSAS implementation costs which had been initially 
compiled in a study and published in 2014. 

In 2017 a study included a review to quantify the EU level opportunity cost of not implementing 
EPSAS, the collection of up to date information on on-going or planned public accounting reforms 
in the Member States and a summary of the impacts of the development of EPSAS for the Capital 
Market Union, investment, growth and jobs and democratic accountability and scrutiny.9 The study 
pointed  to  a  range  of  opportunity  costs,  and  the  quantifiable  costs  were  substantial.  Better 
management and decision-making could bring significant benefits, for example in the management 
of government assets. In 2018 a study focused on the analysis of lessons learnt from experiences 
of accruals implementation, analysis of capacity issues relating to public accounting reforms in the 
Member States, an analysis of how EPSAS could support financial audit and control in the Member 
States in the EU context and methodology for measurement and monitoring of the transparency of 
public sector financial reporting in the Member States.10 

Table 2 presents the estimates for EPSAS implementation cost at EU level in 2025. 

Table 2. Updated EPSAS implementation cost estimates at EU level in 2025 (and comparison to 
2014 restated without the UK) 

Benchmark 

Scenario 1 
Adaptation of IT system 

Scenario 2 
Implementation of new IT 
system 

Cost in billion EUR 

Cost  as  a  %  of  the 
GDP 

A 

B 

A 

B 

1,1 (1,2) 

2,4 (2,1) 

0,01% (0,01%) 

0,01% (0,02%) 

2,2 (1,8) 

9,2 (6,9) 

0,01% (0,02%) 

0,05% (0,06%) 

The table presents the total reform cost and not the yearly cost. The yearly cost can be obtained by 
spreading the total cost over the duration of the project (e.g., five years). 

As regards the evolution of the cost estimate in 2025 compared to that made in 2014, two main 
aspects  must  be  considered.  Costs  estimates  are  downwardly  impacted  by  the  increase  in  the 

8 Updated accounting maturities of EU governments and EPSAS implementation cost (2025) 
9 Collection of additional and updated information related to the potential impacts of EPSAS 
10 Collection of additional and updated information related to the potential impacts of implementing accrual accounting 
in the public sector  

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accounting maturity of some Member States. However, cost estimates are also influenced by other 
factors, namely the increase of government expenditure over the last decade because of inflation 
and other factors, and the change in the conceptual basis of government expenditure from ESA 95 
to ESA 2010, making direct comparisons between them difficult to interpret. The cost in % of the 
GDP decreases in nearly all scenarios. The cost assessment provides indicative information only, 
whereas it enables to establish some trends at the EU level. It provides benchmark information that 
can be used by each MS (or government) to perform its own cost-benefit assessment and EPSAS-
related analyses. Implementation cost is not the only parameter to consider. Costs are mainly one-
off costs while benefits are for the long term. A net cost-benefit assessment should be made. 

The detailed results of the studies are presented in Chapter 3 of this SWD. In relation to benefits 
of accrual accounting in crisis situations, such as under 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 States. 

2.4  Technical and financial support for accrual accounting in the 

Member States 

Smart, sustainable and socially responsible reforms help to strengthen the resilience of economies 
and societies of the EU. The Commission has provided technical and financial support for Member 
States’  government  accounting  reforms.  As  part  of  its  technical  support,  the  Commission 
(Eurostat) facilitated sharing of best practices and initiated discussions on innovative approaches 
for public accounting. The Commission (Eurostat) discussed with government accounting experts 
the  benefits  and  challenges  of  accrual  accounting  reforms  and  has  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.  

The Commission has also provided financial support for public accounting reform efforts in the 
Member  States.  Between  2014  and  2018  the  Commission  (Eurostat)  co-financed  a  range  of 
projects on modernisation of public accounting systems and moving to accruals-based systems. 
This  included  scoping  of  modernisation  needs,  outlining  an  approach  to  implementation  and  a 
communication  plan,  exchange  of  knowledge  and  taking  steps  to  implement  accruals-based 
financial  accounting  systems  at  all  levels  of  government.  The  13  projects  co-financed  by  the 
Commission (Eurostat) for the amount of EUR 3.25 million paved the way or directly contributed 
to the public sector accruals modernisation efforts in eight Member States.11  

11  Germany  (Hesse),  Spain  (Cantabria),  Italy,  Cyprus,  Hungary,  Malta,  Austria  (Burgenland,  Salzburg  and 
Oberösterreich) and Portugal. Malta has also launched a project, CONvErGE – a major investment enabling Connected 
eGovernment, which includes government accounting reform – that benefits from European Structural and Investment 
Funds. 

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This  EU  financial  support  continues  under  the  Technical  Support  Instrument  (TSI)  and  the 
Recovery and Resilience Facility (RRF). The TSI is the EU programme delivered by the European 
Commission  that  provides  tailor-made  technical  expertise  to  Member  States  to  design  and 
implement growth-enhancing and inclusive reforms in a wide range of policy areas. The support 
can take the form of, for example, the provision of expertise related to policy advice, formulation 
of reform roadmaps, as well as studies, training and expert visits on the ground, with the flexibility 
to cover any phase of a reform. The RRF, as a temporary instrument, enables Member States to be 
stronger and more resilient by preparing their economies for the green and digital transitions and 
by addressing the challenges identified in country-specific recommendations under the European 
Semester framework. EU governments have submitted national recovery and resilience plans to 
benefit from the RRF. 

Since  2017  TSI12  has  been  providing  support  for  public  sector  accountancy  reforms  in  nine 
Member  States  through  18  projects  and  facilitated  more  than  10  study  visits  to  other  Member 
States.  Study  visits  are  generally  supported  through  the  TAIEX13  instrument.  TSI  supported 
reforms in Croatia, Cyprus, Greece, Italy, Ireland, Luxembourg, Malta, Poland and Portugal. These 
public  sector  accounting  reforms  acknowledge  the  benefits  of  accruals-based  accounting  for 
Member States. In Greece, Italy and Portugal the reforms align with commitments made in the 
national recovery and resilience plans under the RRF. The national plans included, for example, 
designing a chart of accounts for EPSAS/IPSAS  based accrual  accounting, establishing  a State 
Accounting Entity, automation of accounting processes, adoption of accrual accounting policies, 
training of the relevant personnel and the design and introduction of the Government Enterprise 
Resource Planning (ERP).  

The intervention logic of TSI support for accrual accounting reform follows a linear approach and 
targets logically connected stages in the process such as (1) approve a conceptual framework, (2) 
agree a set of accounting standards, (3) elaborate a multidimensional chart of accounts, (4) build 
capacity through guidelines and training courses, and (5) provide  IT support to  relevant  public 
entities.  

Some Member States, such as Italy and Greece,  have received multiyear support following the 
progression of the intervention logic. Other Member States have chosen the most relevant support 
measures depending on their national context, in Poland SRSP supported the elaboration of a chart 
of  accounts;  in  Portugal  two  distinct  reforms  included  (1)  the  drafting  of  specific  accounting 
policies  and  developing  specifications  for  a  new  integrated  financial  management  information 
system and (2) supporting the Madeira region to improve consolidation of accounts.  

12 Initially the Structural Reform Support Programme (SRSP) followed by Technical Support Instrument (TSI) from 
2021. 
13 https://enlargement.ec.europa.eu/funding-technical-assistance/taiex_en  

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These  measures  have  been  delivered  by  best  available  technical  expertise  from  private  and 
international  organisations.  The  choice  of  provider  reflects  the  needs  of  the  Member  States 
receiving the support.  

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Annex 2.1. List of EPSAS issue papers 

Issue paper on accounting treatment of revenue (October 2024) 

Issue paper on accounting treatment of transfer expenses (October 2024) 

Issue paper on consolidation of financial statements (October 2018) 

Issue paper on loans and borrowings (October 2018) 

Issue paper on notion of control (October 2018) 

Issue paper on provisions etc. (October 2018) 

Issue paper on service concession arrangements (October 2018) 

Issue paper on disclosures (April 2018) 

Issue paper on grants and other transfers (April 2018) 

Issue paper on intangible assets (April 2018) 

Issue paper on applying discount rates (April 2018) 

Issue paper on chart of accounts (October 2017) 

Issue Paper on social contributions (October 2017) 

Issue Paper on military assets (April 2017) 

Issue paper on heritage assets (March 2017) 

Issue paper on segment reporting (March 2017) 

Issue paper on infrastructure assets (March 2017) 

Issue Paper on social benefits (November 2016) 

Issue Paper on employee benefits (November 2016) 

Issue Paper on taxes (October 2016) 

Issue Paper on SLREs (June 2016) 

Issue Paper on IPSAS options (June 2016) 

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3.  Achievements and plans of Member States in 

implementing accruals-based accounting in the public 
sector 

3.1  Current situation with regard to accrual accounting in Member 

States 

3.1.1. 

Introduction 

A study undertaken on behalf of the Commission (Eurostat) on the potential costs and benefits of 
implementing EPSAS (European Public Sector Accounting Standards) in the Member States and 
the  suitability  of  IPSAS  (International  Public  Sector  Accounting  Standards)  for  developing 
EPSAS, was published in September 2014 (2014 PwC study)14. 

To estimate the total cost of EPSAS implementation, the study takes an approach that allows some 
trends at EU level to be established, based on a number of working assumptions and with clear 
limitations. 

Each government level (central, state where applicable, local and social security fund) has been 
given a score (expressed on a maximum total of 100 points) to reflect its degree of maturity with 
the future EPSAS standards (with IPSAS being taken as a proxy for EPSAS as EPSAS does not 
yet exist). The cost of the efforts that remain to be made to achieve 100% EPSAS compliance has 
been  assessed  based  on  a  standard  cost  (cost  to  gain  one  point  of  maturity)  calculated  with 
reference to limited benchmarking cost information of Member States’ prior accounting reforms 
and considering the government budget to apprehend the scale of the reform. Various scenarios 
have been considered, considering the estimated capacity of the IT systems to support an accrual 
accounting implementation or not. The costs obtained from each Member State have been summed 
to assess the cost of implementing EPSAS at EU level. 

Considering  that  IPSAS  has  developed  substantially  since  the  2014  study,  and  that  accounting 
reforms  and  improvements  have  also  taken  place  in  several  Member  States,  the  Commission 
(Eurostat) requested its contractor to update the maturity scores, and the related cost calculations 
based on current but also expected future accounting practices in case of on-going/ planned reforms 
where applicable. The accounting maturity scores of governments within the EU, and associated 

14 Collection of information related to the potential impact, including costs, of implementing accrual accounting in 
the public sector and technical analysis of the suitability of individual IPSAS standards (Ref. 2013/S 107-182395), 
PwC, September 2014 - https://ec.europa.eu/eurostat/documents/9101903/18642857/epsas-study-final-pwc-
report.pdf/2b39cdab-0c76-f086-563a-df34317691e3?t=1738070627448  

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costs calculations, have therefore been updated twice: a first updated report was published in June 
202015 and a second updated report was published in March 202516. 

3.1.2. 

Methodological approach to determine Member States accounting maturities 

A consistent methodology has been applied throughout the studies, from 2014 to 2025. For each 
of  the  three  studies,  all  27  Member  States  completed  research  questionnaires  covering  all 
subsectors of the general government sector in the EU (central, state where applicable, local and 
social security funds) designed to capture an in-depth view of the accounting practices for all those 
governments. The questionnaires have been adapted in 2020 and 2025 to consider relevant new 
developments in the IPSAS standards. The accounting maturity has been measured for 10 different 
accounting  areas  (reporting,  consolidation,  fixed  assets,  intangible  assets,  inventories,  revenue, 
accruals and expenses, employee benefits, provisions, financial instruments), each of them being 
a cluster of IPSAS standards which are naturally related in terms of the type of transactions they 
cover. The accounting maturity score obtained is an effort-based score and gives an indication how 
much effort (cost) will still be required to fully implement accrual accounting in compliance with 
IPSAS. The total maximum score for each accounting area reflects the nature of the government 
activities.17 

3.1.3. 

2025 accounting maturity 

The following maps provide an indication of the level  of accounting maturity per  EU  Member 
State,  for  each  subsector  of  general  government.  Member  States  have  been  reported  in  three 
categories (in descending order of accounting maturity):  

•  Category 1: those with an accounting maturity of 70% or more are deemed to apply 

accrual accounting to a large extent; 

•  Category 2: those with an accounting maturity of 40% or more but below 70% are 

deemed to partially apply accrual accounting; 

•  Category 3: those with an accounting maturity of less than 40% are deemed to apply cash 

accounting to a large extent.   

15 Updated accounting maturities of EU governments and EPSAS implementation cost, PwC, June 2020 - 
https://ec.europa.eu/eurostat/documents/9101903/9700113/Updated-accounting-maturities-and-EPSAS-
implementation-cost-June+2020.pdf  
16 Updated accounting maturities of EU governments and EPSAS implementation cost, PwC, March 2025 - 
https://circabc.europa.eu/ui/group/8b9f731d-4826-4708-9069-5f65a9edc9bf/library/ab3784a0-25ec-4724-bbea-
7f4b73c8e57c/details  
17 Further details on the methodology, including the limitations of the approach, can be found in chapter 3 of the 
2014 PwC study (from page 20 to page 25 and from page 32 to page 35), from page 4 to page 11 of the 2020 PwC 
study and from page 4 to page 11 of the 2025 PwC study. 

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Different  colours  have  been  used  for  the  three  categories  to  help  visualise  how  mature  each 
Member State is for the subsector presented. The way of presentation adopted also clearly indicate 
a lack of accounting harmonisation between Member States and even sometimes across the various 
subsectors  of  general  government  within  the  same  country.  Detailed  results  of  the  accounting 
maturity assessment, based on the state of play of the accounting practices as of 1 January 2025, 
are provided for general government and its subsectors in Annex 3.1. 

Figure  1.  Member  States  accounting  maturities  across  the  various  subsectors  of  general 
government in 2025 

Central government 

State government 

Local government 

Social security funds 

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3.1.4. 

2025 accounting practices 

Transposition of IPSAS into the national legislation of EU Member States 

The transposition of IPSAS into the national legislation of EU Member States was assessed using 
a survey of the 27 Member States, whose results allow to distinguish five distinct clusters, ranging 
from  ‘explicit  reference  to  IPSAS  as  the  primary  basis  for  developing  government  accounting 
standards’ to ‘not using IPSAS as a source of inspiration’. 

Accounting practices were surveyed only for central government subsector. Responses from all 
Member States are set out below.  

Table 3. Transposition of IPSAS into the national legislation of EU Member States 

To what extent are the International Public Sector Accounting Standards 
(IPSAS) reflected in the accounting legislation applicable to your 
government? 

a. Accounting legislation applicable to your government specifies an 
explicit requirement to comply with the IPSAS framework (IPSAS with 
no modifications to any of their requirements, while selecting from the 
permitted options) 
b. Accounting legislation applicable to your government makes explicit 
reference to IPSAS as the primary basis for developing your government 
accounting standards (IPSAS adopted and modified for any jurisdictional 
features) 
c. IPSAS are in practice used as a primary basis for developing your 
government accounting standards although no explicit reference to them 
is made in the accounting legislation applicable to your government 
d. IPSAS are in practice used as a source of inspiration (although not as a 
primary reference) for developing your government accounting standards 
although no explicit reference to them is made in the accounting 
legislation applicable to your government 

e. IPSAS are not used as a source of inspiration for developing your 
government accounting standards 

Central government 
2025 

None 

Estonia, Greece, Italy, 
Lithuania, Portugal, Spain 

Austria, Czechia, Cyprus, 
Denmark, Ireland, Latvia, 
Malta, Slovakia 

Belgium, Croatia, Finland, 
France, Romania, Slovenia, 
Sweden 

Bulgaria, Germany, 
Hungary, Luxembourg, 
Netherlands, Poland 

Based upon the above findings, IPSAS appear to be a common source of reference for more than 
three quarters of Member States (21 out of 27) at the central government level, as combined with 
their own specific accounting legislation. For more than half of the Member States (14 out of 27), 
IPSAS is used as a primary basis for developing their own government accounting standards. 

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3.2  Changes to accrual accounting in Member States since 2013 

3.2.1. 

Overall picture 

Interesting  developments  to  be  noted  since  2013  include  an  overall  gradual  increase  of  the 
government accounting maturity at all levels (central, state, local, social security funds) within the 
EU:  

•  Reforms are finalised at the state and local levels in Austria, are about to be finalised or 
are in progress in various other Member States (Croatia, Cyprus, Greece, Ireland, Italy, 
Luxembourg, Malta, Poland, Portugal, for the local level in two states in Germany), 
which translated to varying degrees in an increase of the accounting maturity. In most 
cases, IPSAS has been taken as a reference point; 

•  The use of IPSAS as a reference point (whether explicitly indicated in the national 

legislation or not) has increased (with more Member States transposing IPSAS into their 
national legislation) and country-wide accounting reforms are a driver for accounting 
harmonisation within the country (more than half of the Member States apply or will 
apply soon following the ongoing reforms similar accounting rules at all levels of 
government); 

•  Outside the context of country-wide reforms, select improvements of the accounting 

policies are also noted in many other Member States. 

The average increase of the accounting maturity per subsector of general government, expressed 
in percentage points, since 2014 is as follows: central +9%, state +25%, local +9%, social security 
funds +5%).  

In addition, most Member States report a gradual improvement of their financial reporting process 
(e.g., upgrade of their core IT (ERP18 or other) systems, implementation of a shared-service centre 
that brings efficiencies in the reporting process,  etc.) that however  does  not  necessarily impact 
their measured accounting maturity.  

Detailed accounting maturity scores for 2014 and changes from 2014 to 2025 per Member State 
for each subsector of general government are provided in Annexes 3.2 and 3.3. 

3.2.2. 

Past reforms and other key developments at Member State level 

A summary of the past reforms and other key developments for the period 2014-2025 in each of 
the 27 Member States is provided below: 

18 Enterprise Resource Planning. 

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Belgium 

On  a  central  government  level,  accounting  reforms  were  implemented  in  2019  to  prepare  and 
present  annual  consolidated  financial  statements  for  federal  entities,  excluding  commercial 
government business enterprises. On a state level, the accounting reforms in Flanders gradually 
enabled to establish and anchor modern, transparent budget and accounting rules in line with ESA 
and  Belgian  GAAP.  Further,  accrual  accounting  was  introduced  in  Wallonia,  supported  by  the 
implementation  of  an  SAP  ERP  system  starting  from  January  2022.  Various  accounting 
harmonisation or accounting simplification initiatives also took place on the local level. 

Bulgaria 

Several significant reforms have occurred from 2013-2016, such as the depreciation of non-current 
assets, the capitalisation of infrastructure and heritage assets, upgrade of the chart of accounts for 
improved classification of assets and liabilities according to ESA 2010, accruals-basis accounting 
for grants revenue, and the introduction of financial performance and cash-flow statements. Post-
2019 reforms focused on modernising accounting systems through implementing a unified ERP 
system (SAP) across municipalities and central administrations, with ongoing training. 

Czechia 

The  accounting  reforms  included  the  implementation  of  full  accruals  for  most  public  sector 
accounting entities, standardised rules and methods, and a chart of accounts for covered entities, 
and a unified financial statement approval process. 

Denmark 

At the central level, the past reforms included the application of the expected credit loss model for 
the  measurement  of  receivables  and  loans,  change  from  amortised  cost  to  fair  value  in  the 
measurement of financial investments and the preparation of cash flow statements. No significant 
developments are to be noted at the local and social fund levels. 

Germany 

At the central level, developments included technical modernisations and the establishment of an 
account  assignment  plan  for  uniform  standards  at  the  federal  and  state  levels.  At  the  state 
government  level,  no  major  accounting  reforms  were  implemented.  The  three  states  that  apply 
accrual accounting currently are Hamburg, Bremen and Hesse. At the local level, two additional 
states now require the use of accrual accounting by their municipalities (Baden-Württemberg from 
2020 and Schleswig-Holstein from 2024), bringing the number of area states (excluding Berlin, 
Bremen and Hamburg as these states do not have a municipal level) requiring accrual accounting 

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for  the  municipalities  in  their  purview  at  11  out  of  13,  with  only  Bavaria  and  Thuringia  still 
permitting the use of cash accounting19. 

Estonia 

At the central level, accounting reforms included the concentration of accounting and other support 
functions of most entities into a state shared service centre. 

Ireland 

A major accounting reform was introduced in 2019 where the path towards IPSAS implementation 
for  central  and  local  governments  as  well  as  social  security  funds  was  outlined.  Nine  priority 
accruals-based  central  government  accounting  standards  (CGAS),  based  on  IPSAS,  for 
government  departments,  offices  and  the  social  insurance  fund  were  put  into  effect  with  the 
remaining standards to be introduced by January 2025. Accruals-based financial statements will 
continue to be reported alongside the traditional cash-based appropriation accounts. Furthermore, 
technological improvements were also performed.  

Greece 

Across  all  levels  of  government  (central,  local  and  social  security  funds),  accounting  reforms 
include the implementation of a new accruals-based accounting framework based on IPSAS from 
2025. This particularly includes the introduction of a unified chart of accounts, new classification 
structures, double-entry accounting, development of a central administration ERP system, and the 
creation of a fixed asset register.  

Spain 

The reforms implemented at the central government and social funds levels include aligning the 
accounting treatment and related disclosures for concession agreements and heritage assets with 
IPSAS. At the local level, the central government regulation is taken as a reference. At the state 
government  level,  most  autonomous  communities  had  to  align  their  standards  with  the  central 
government's  public  accounting  plan  (PGCP),  which  serves  as  a  framework  for  convergence, 
although two out of 17 autonomous communities have not significantly adapted to this regulation. 

France 

At  the  central  government  level,  the  accounting  standard  relating  to  sovereign  revenues  were 
revised  in  2017.  At  the  local  government  level,  an  accounting  standards  manual  for  local 
authorities had been published and approved in 2023. 

19  The  country  report  under  the  2025  European  Semester  Spring  package  (see  page  35)  includes  comments  on 
Germany’s status in implementing accrual accounting for government relative to the EU average.  

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Croatia 

Across all levels of government (central, local and social funds), the accounting reforms included 
the development and implementation of a new web application for financial reporting in the budget 
system, replacing the old IT support system, and the establishment of a register of budgetary and 
extra-budgetary  users  for  managing  financial  statements  and  data  launched  in  March  2022, 
enabling direct digital management and submission of financial statements without paper forms.  

Italy 

The  accounting  reform  consists  in  the  design  and  implementation  of  an  IPSAS-based  accrual 
accounting reform in the Italian public administration. The project, started in 2018, included so far 
three  phases:  (1)  country  visits  to  leverage  accrual  accounting  reform  experiences  and  best 
practices, (2) gap analysis between existing rules and IPSAS and (3) design of an action plan to 
implement  the  reform.  This  involved  among  others  organising  the  standard-setting  for  Italian 
accounting  standards  (ITAS)  and  creating  a  governance  structure  to  oversee  the  reform.  The 
nation-wide  accounting  reform  is  part  of  the  Italian  National  Recovery  and  Resilience  Plan  to 
achieve significant coverage by 2027.  

Cyprus 

Across  the  central  government,  the  accounting  reforms  include  the  adoption  of  accruals-based 
accounting  using  IPSAS,  development  of  IPSAS  accounting  policies  and  adaptation  of  the 
necessary processes and information flows for the preparation of consolidated financial statements. 
Additionally, the Treasury is implementing a consolidation and financial statements preparation 
tool by the end of 2025. At the local level, an ERP system was developed to support a common 
chart  of  accounts  and  common  accounting  practices  across  municipalities,  and  the  adoption  of 
IPSAS-based  accounting  policies  by  municipalities  in  2025,  replacing  International  Financial 
Reporting Standards (IFRS). For the social security fund in Cyprus, the accounting reforms include 
transitioning from cash to accrual accounting, aligned with the central government's timetable.  

Latvia 

Within  the  central  government,  the  major  accounting  reforms  included  upgrading  accounting 
requirements to align with IPSAS for all public sector entities, changes in accounting and reporting 
for financial instruments, provisions, deferred revenue, investment property and biological assets, 
and  implementation  of  centrally  set  discount  rates.  Furthermore,  accrual  accounting  principles 
were  implemented  for  property  tax  accounting  at  the  local  level  and  for  social  security 
contributions at the social security funds level. 

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Lithuania 

For  Lithuania,  the  accounting  reforms  included  the  centralisation  of  accounting  and  financial 
reporting  functions  for  central  government  public  sector  entities,  implemented  gradually  from 
2018 until 2026. Additionally, a modernised uniform accounting IT system for automation and 
integration with other IT systems was also defined and implemented.  

Luxembourg 

Within the central government, a feasibility study was conducted that explored various areas such 
as  analysis  of  current  budgetary  accounting  and  statistical  reporting  systems,  evaluation  of 
opportunities and challenges for implementing accrual accounting, gap analysis between current 
system and selected options for reform and gap analysis between budgetary accounting and IPSAS 
standards. At the local government level, accounting developments were implemented between 
2013 to 2018, such as, introduction of detailed financial position statements for comprehensive 
financial overview, alignment of the chart of accounts with Luxembourg accounting rules, revision 
of accounting guides for financial and budgetary accounting, and the establishment of a steering 
committee to oversee the process.  

Hungary 

In Hungary, the main accounting reforms included the introduction of a new, uniform accounting 
system  for  public  finances  that  captures  accruals-based  data  alongside  cash  data,  starting  from 
January  2014,  as  well  as  the  implementation  of  a  cash  flow  and  modified  accrual  accounting 
system. Further improvements included the development of an accounting data collection system 
for  monthly  budget  and  quarterly  financial  data,  the  introduction  of  a  new  integrated  financial 
management information system for the central budget in 2022, the transition of local governments 
to the ASP system between 2015 and 2019, and the creation of a unified master data management 
system, a data warehouse and a public finance portal. 

Malta 

Key developments at the central government level included the implementation of the accruals-
based  Corporate  Financial  Management  Solution  (CFMS)  to  support  the  implementation  of 
IPSAS. 

Netherlands 

There has been no major accruals-based accounting reform from 2013 to 202420.  

20  The  country  report  under  the  2025  European  Semester  Spring  package  (see  page  36)  includes  comments  on 
Netherland’s status in implementing accrual accounting for government relative to the EU average. 

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Austria 

In the central government, the introduction of a binding medium-term expenditure framework with 
statutory expenditure ceilings, a new reserve regime, a new outcome-oriented budget structure, 
and  the  implementation  of  accrual  budgeting  and  accounting  based  on  IPSAS  which  was  fully 
finalised by 2013. At the state and local levels, similar reforms were implemented and came into 
force in 2020, requiring adjustments to budget and accounting regulations, IT systems, and training 
for administration and politics.   

Poland 

The accounting reforms involved the development of detailed concepts for changes at the Ministry 
of  Finance  level,  in  coordination  with  the  budgetary  system  reform,  which  are  being  verified, 
tested, and consulted with selected public sector entities. 

Portugal 

The  accounting  reforms  focus  on  enhancing  financial  management  and  transparency  through 
several  key  initiatives.  These  include  the  implementation  of  integrated  financial  management 
systems  (IFMIS)  to  align  economic  and  budgetary  policy  objectives,  the  introduction  of  new 
accounting frameworks and uniform accounting systems, and the adoption of accruals-based data 
alongside cash data. The reforms also emphasize the integration of modern technologies, such as 
e-invoicing  and AI, and aim to  streamline and consolidate various accounting processes across 
sectors. Additional initiatives aim at enhancing budget transparency and responsibility.  

Romania 

At  the  central  government  level,  the  accounting  reforms  included  the  development  of  a  new 
standardised electronic form for reporting budgetary execution and financial statements monthly, 
implementing  cross-validation  against  treasury  data  for  increased  reliability,  and  producing  an 
integrated IT system for detailed and multi-criteria analysis. 

Slovenia 

The  accounting  reforms  included  revisions  to  accounting  rules,  annual  implementations  of  the 
regulation on the unified chart of accounts, changes in the IT accounting system, adoption of a 
new portal for and automation of e-invoicing, and revisions to the regulation on the preparation of 
the consolidated balance sheet of the state and municipalities with automation through an online 
application. 

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Slovakia 

The  accounting  reforms  included  the  implementation  of  the  central  economic  system  to  unify 
administrative and economic services in central budget and semi-budget organisations into one IT 
system,  ensuring  consistent  application  of  accounting  standards,  improving  the  quality  of 
accounting outputs, and linking with other central information systems. 

Finland 

In the central government, the accounting reforms included the development and publication of 
consolidated  central  government  financial  information  starting  from  2015,  enhancements  for 
preparing  consolidated  information,  including  intergovernmental  eliminations,  from  2020, 
implementation of a common SAP ERP system for accounting and HR reporting by  the end of 
2016, and the use of a shared service center for accounting and financial management tasks since 
2017. At the local level, municipalities have been reporting their financial statements and other 
financial data in an automated format since 2021 to the State Treasury's information service. 

Sweden 

Accrual accounting principles have been applied across all levels of the Swedish government for 
many  years.  Following  the  reform  to  accrual  accounting,  several  further  enhancement  projects 
have  been  completed  since  2013  (e.g.  in  relation  to  the  accounting  for  financial  instruments, 
revenue from taxes, guarantees and the introduction of the components approach applicable for 
specific fixed assets, etc.). 

3.3  Plans of Member States with regard to accrual accounting 

3.3.1. 

Overall picture for 2030 projected accounting maturity 

The following maps provide an indication of the projected level of accounting maturity per EU 
Member State, for each subsector of general government, as of 2030. 

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Figure  2.  Member  States  projected  accounting  maturities  across  the  various  subsectors  of 
general government in 2030 

Central government 

State government 

Local government 

Social security funds 

On  average,  we  note  an  overall  projected  increase  of  the  accounting  maturity  at  all  levels  of 
government (expressed in percentage points: central +11%, state +1%, local +4%, social security 
funds  +5%).  The  2030  projected  accounting  maturity  by  country  and  government  sector  is 
provided in Annex 3.4. 

The  most  significant  developments  are  expected  from  the  remaining  impacts  of  ongoing 
accounting reforms in Greece, Malta, Italy, Cyprus, Portugal, and to a lesser extent in Ireland and 
Slovakia, and from future reforms in Luxembourg. 

Continuous  improvements  to  the  financial  reporting  process,  outside  the  context  of  an  overall 
accounting reform, can also be observed in most Member States. However, not all of them translate 

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into an increase of the accounting maturity of the Member States concerned. Those improvements 
aim at achieving greater efficiency and automation of the financial reporting process (e.g. change 
or  adaptation  of  the  core  IT/  ERP  or  consolidation  systems,  set  up  of  shared-service  centers), 
producing information for better decision making, aligning with the evolution of IPSAS, etc.  

Finally,  it  is  worth  noting  that  some  reforms  have  been  initiated  under  the  impetus  of  the 
Commission (EPSAS project, EU funded-projects, inclusion in the national recovery and resilience 
plan), while others are pending, awaiting the issuance of clear rules and guidance regarding the 
future EPSAS standards. 

3.3.2. 

Planned reforms and other key expected developments at Member State level 

A summary of the planned reforms and other key developments for the period 2025-2030 in each 
of the 27 Member States is provided below: 

Belgium 

No  significant  additional  reforms  are  planned  in  future  years.  However,  advancements  are 
envisioned, including further harmonisation of IT accounting systems at some levels. In Wallonia 
(state level), there is a plan to consolidate financial reports of government units by 2030. 

Bulgaria 

The  accounting  reforms  include  the  expansion  of  SAP  implementation  for  central  government 
administration and local governments, excluding social security funds and autonomous budgetary 
units. 

Czechia 

Further reforms are planned to implement IPSAS and to digitise the accounting across all the entire 
public sector entities. 

Denmark 

No significant accounting reforms are planned on central government level and for social funds. 
At the local level, harmonisation of accounting principles is expected from January 2025. 

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Germany 

At  the  central  level,  post-2025,  further  advancements  to  the  IT  infrastructure  are  touching  the 
accounting system. At the state and social funds levels of government, no major reform is planned 
for the period21.  

Estonia 

No further significant reforms are foreseen during the period. 

Ireland 

The last steps of the previously introduced reforms will be implemented across the central and 
social funds levels of government. No significant accounting reform is planned at the local level.  

Greece 

Across  all  levels  of  government,  Greece  will  continue  to  implement  the  reforms  that  were 
previously introduced, capitalising on a government-ERP system that will be fully functional and 
focusing on users’ training.  

Spain 

At  the  central,  local  and  social  funds  levels  of  government,  future  reforms  will  deal  with  the 
implementation of further accounting standards inspired by IPSAS. At the state level, the planned 
reforms are foreseen to build on the previous reforms.  

France 

Across all levels of government, no further significant accounting reforms are foreseen. 

Croatia 

The  planned  modernisation  reforms  across  all  levels  of  government  include  strengthening  the 
Ministry of Finance's capacity in accounting and budget execution methodology and reforming the 
IT system.  

Italy 

Capitalising on the lessons learnt from a pilot phase, a single accrual accounting system will be 
implemented for the entire public sector administration, including the finalisation and approval of 

21  The  country  report  under  the  2025  European  Semester  Spring  package  (see  page  35)  includes  comments  on 
Germany’s status in implementing accrual accounting for government relative to the EU average. 

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the conceptual framework, accrual accounting standards (ITAS) and a chart of accounts, with the 
reform foreseen to enter into force by 2027.  

Cyprus 

Across the central government, local government and social security funds, no other significant 
accounting reforms are planned apart from the move to accruals accounting which is planned to 
be finalised by 2026.  

Latvia 

For the central, local and social security funds, there are no planned significant accounting reforms 
during the period. 

Lithuania 

No major significant accounting reforms are planned during the period. 

Luxembourg 

Capitalising  on  the  conclusions  of  preliminary  studies,  the  central  government  is  envisaging  a 
possible move to accrual accounting based on IPSAS, with limited disclosure requirements. No 
formal decision has been taken yet.  

Hungary 

The various systems, established in the last decade will be further modernised and refined, to be 
followed  by  the  alignment  with  EPSAS,  with  capabilities  expected  to  be  extended  beyond 
budgetary accounting.  

Malta 

For the next five years, the significant accounting reforms include the implementation of IPSAS 
across  all  government  departments,  streamlining  processes  within  the  Corporate  Financial 
Management Solution (an accruals-based ERP system) for IPSAS compliance, creating guidelines 
and supporting departments for IPSAS implementation. 

Netherlands 

No significant accounting reform is planned in the next five years22. 

22  The  country  report  under  the  2025  European  Semester  Spring  package  (see  page  36)  includes  comments  on 
Netherland’s status in implementing accrual accounting for government relative to the EU average. 

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Austria 

In the forthcoming period, the accounting reforms include measures to improve accounting quality 
and the preparation of a draft amendment to the organic budget law for adjustments requiring legal 
changes, such as full consolidation. 

Poland 

The planned accounting reforms involve modifying public sector accounting to increase IPSAS 
compliance and introduce a legal system for issuing whole-of-government financial statements. 
New solutions are under development. 

Portugal 

The upcoming accounting reforms include the implementation of financial accounting in public 
accountability,  the  presentation  of  consolidated  financial  statements,  the  development  of 
technological solutions for the collection, analysis, and consolidation of public accounts.  

Romania 

The  plans  for  the  next  few  years  include  the  improvement  of  accrual  accounting  and  the 
implementation of the main IPSAS which will be transposed in EPSAS.       

Slovenia 

The  planned  accounting  reforms  include  preparing  a  new  accounting  law  based  on  accrual 
principles for direct budget users, amending Slovenian accounting standards and introducing new 
solutions for recognising and evaluating business events, particularly for measuring fixed assets. 

Slovakia 

The planned accounting developments include the further refinement of the previously enacted 
reforms.  

Finland 

Across the central government, planned reforms between 2025 and 2030 will primarily focus on 
upgrading the SAP consolidation tool as well as on various projects to develop the processes and 
IT  systems.  Further,  the  use  of  digital  tools  (such  as  robotics)  and  artificial  intelligence  in  the 
preparation of disclosures in the financial statements will be explored. No reform is planned at the 
local government level. 

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Sweden 

No  major  reforms  are  currently  foreseen  between  2025  and  2030  across  the  various  levels  of 
government. Further (limited) enhancements however are expected to take place.  

3.3.3. 

Global trend towards accrual accounting 

According  to  IFAC,  CIPFA  and  IPSASB  International  Public  Sector  Financial  Accountability 
Index: 2025 Status Report23, which collects, verifies, and analyses current and projected financial 
reporting bases and frameworks used by federal and central governments around the world, the 
trends towards accrual accounting is clear.  

Table 4 indicates the number and percentage of jurisdictions that make use of accrual accounting 
in 2024 or intend to do so in 2030. 

Table 4. Evolution of financial reporting bases as per  International  Public  Sector  Financial 
Accountability Index 

Cash 
Partial accrual 
Accrual 

2024 Index 
51 (30%) 
65 (38%) 
53 (31%) 

2030 Revised Projection 
34 (20%) 
40 (24%) 
95 (56%) 

Source: IFAC/CIPFA/IPSASB 2025 Status Report. 

Furthermore,  the  percentage  of  jurisdictions  reporting  on  accrual  that  make  use  of  IPSAS 
Standards is also expected to increase (2024: 66%, 2030 (projection): 81%). 

The  EPSAS  developments  at  European  level  are  thus  part  of  a  global  trend  towards  accrual 
accounting, with IPSAS Standards serving as a reference point for jurisdictions making the move.  

3.4  Lessons learnt and (expected) benefits from reforms 

The  use  of  accrual  accounting  based  on  consistent  application  of  high-quality  standards  is  an 
important element of a modern public financial management (PFM) system. Harmonised accruals-
based accounting systems enable production of comparable financial information that provides a 
comprehensive  and  accurate  view  of  government  financial  performance,  financial  position  and 
cash  flows.  This  information  in  turn  stands  to  inform  decisions,  build  investor  confidence  and 
demonstrate public accountability. Further, at the EU level, accruals-based accounting information 

23 International Public Sector Financial Accountability Index, 2025 Status report, IFAC (International Federation of 
Accountants), CIPFA (The Chartered Institute of Public Finance & Accountancy) and IPSASB (International Public 
Sector Accounting Standards Board), September 2025, https://www.ifac.org/knowledge-
gateway/discussion/international-public-sector-financial-accountability-index-2025 

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contributes to the effective surveillance of fiscal policies, by providing reliable source data for the 
efficient production of high-quality finance statistics. 

Member  States  have  been  requested  to  provide  their  insights  about  the  lessons  learnt  and  best 
implementation practices as part of the 2014 PwC study and of an update of the study conducted 
in 201824. They have also been asked to share their insights about the benefits of applying accrual 
accounting  as  part  of  the  2014  PwC  study  and  of  the  updated  information  gathering  exercise 
conducted  in  2025  on  behalf  of  the  Commission  (Eurostat).  The  findings  of  these  surveys  are 
presented below. 

3.4.1. 

Lessons learned from accrual accounting reforms and tips for implementation 

Best implementation practices should be followed to make the conversion as efficient as possible. 
These practices may stand to achieve maximum efficiency and minimise implementation costs. 
There  is  however  no  one-fits-all  solution  and  each  government  should  determine  and  apply 
implementation  practices  that  best  fit  its  own  needs.  Examples  of  effective  practices  were 
described by governments that have already experienced an accrual accounting reform.  

These implementation practices are presented below and are grouped in terms of: 

•  Holistic approach to implementation. 
•  Early preparation. 
•  Project organisation and approach. 
•  Communication and change management.  
•  Training. 
•  Processes.  
•  Systems. 

Holistic approach to implementation 

Making the change to accrual accounting standards is much more than just a change in accounting 
rules. It impacts the entire government’s organisation. In order to get it done, the various challenges 
arising from implementation should be adequately addressed and a well-defined methodology and 
action  plan  should  be  developed.  It  is  also  of  utmost  importance  that  the  project  receives  full 
political  support  at  each  level  of  government,  and  that  sufficient  and  adequate  resources  are 
allocated to it. Implementing accrual accounting affects the entire entity’s policies, people, systems 
and processes.  

24 Collection of additional and updated information related to the potential impact of implementing accrual 
accounting in the public sector, PwC, November 2018. 

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The  following  challenges  have  been  reported  by  the  sample  countries  having  experienced  an 
accrual accounting reform. Table 5 presents the implementation challenges by reform dimension. 

Table 5. Implementation by accrual accounting reform dimension 

Policies 

Processes 

•  Adapting existing financial rules and 

regulations. 

•  Documenting accounting policies. 
•  Developing comprehensive guidance and 

manuals, as well as concise implementation 
rules for the most complex topics. 

•  Managing the transition period and 

monitoring the implementation phases. 
•  Checking data quality during the reform 

process, designing quality control 
procedures. 

•  Setting up data collection procedures, in 
particular in respect of fixed assets. 
•  Ensuring compliance with existing 

regulatory framework. 

People 

Systems 

•  Adapting existing IT systems, and/or 
developing new IT solutions/modules 
tailored to the reform requirements. 

•  Translating organisational processes into the 

IT environment. 

•  Inspiring change of mentalities/cultural 

change. 

•  Ensuring political commitment and 

increasing staff and public awareness. 
•  Building up public sector accountants’ 
expertise in terms of new practices and 
procedures. 

•  Developing training programmes and 
allowing knowledge transfer on key 
accounting areas. 

Early preparation 

For entities that use cash-based accounting practices and/or do not have sophisticated IT systems 
and  processes  in  place,  a  longer  transition  period  to  accruals  accounting  may  be  needed  to 
accommodate  adaptations  or  investments  in  new  systems  to  be  made  in  order  to  capture  and 
analyse the increased accounting data and information, especially in areas such as fixed assets, 
which  require  the  biggest  implementation  efforts.  Those  governments  are  encouraged  to  start 
preparing the transition as early as possible. 

Governments  with  an  advanced  stage  of  accounting  maturity  may  start  the  process  a  bit  later, 
although it is recommended to be pro-active to smooth the impact of the transition over several 
years. 

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Best implementation practices include: 

•  A step-by-step approach to implementation starting with a diagnostic that would identify 
the  challenges  linked  to  implementation  for  all  government  entities  in  the  scope  of  the 
project and establish a roadmap for successful conversion; 

•  The use of dry-run financial statements and their review by auditors, in order to identify 

areas for improvement and set a remediation plan based on lessons learnt. 

Organisation and approach 

The results of the studies highlight the following best implementation practices: 

•  Efficient  and  rigorous  project  management  based  on  a  clear  project  structure  and  well-
defined responsibilities: strong coordination and practical guidance given by a central team, 
followed by a strong monitoring of the implementation, are considered as a key success 
factor; 

•  Early analysis of the new reporting environment and risks, considering the impact on fiscal 
policy:  the  diagnostic  and  gap  analysis,  tailored  to  the  specific  characteristics  of  the 
government, should result in a well-thought roadmap for implementation and project plan. 
•  Taking a pragmatic approach for the preparation of the opening balance sheet, focusing 

first on significant transactions and balance sheet items; 

•  Taking a pragmatic approach with a view toward continual improvement; 
•  Using  pilot  projects  on  a  smaller  scale  to  learn  from  implementation  experiences  and 

capitalising on them when managing the transition at the level of the other entities. 

Communication and change management 

Adopting accrual accounting requires a significant cultural shift in the mindset of management, 
staff, regulators, fund providers and other stakeholders. For this to be successful, it is essential that 
change management processes, including awareness campaigns, are put in place. 

As  regards  the  communication  aspect,  the  results  of  the  study  highlight  the  following  best 
implementation practices: 

•  Regular and tailored communication to the various stakeholders (staff, politicians, media, 
citizens,  etc.):  efficient  communication  with  all  parties  interested  is  crucial  in  order  to 
minimise the difficulties linked to the change of culture; 

•  Clear vision and political support: political, as well as top management buy-in and support, 
should be reflected in sufficient priority given to the project in order to keep the project 
momentum. 

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Training 

Constant training efforts are required throughout the life of the transformation and beyond. These 
can include: 

• 

Initial  training  and  continuous  learning  programmes  for  staff,  for  example  with  the 
organisation of yearly seminars and annual meetings, as well as with the implementation 
of a helpdesk; 

•  Organisation  of  the  transfer  of  knowledge  and  competencies  to  the  entity’s  staff, 
development and sharing of common training and learning platform, use of the ‘train the 
trainer’ approach (snowball effect); 
Involvement of audit authorities in the process. 

• 

Processes 

Existing administrative and operational processes need to be adapted, or new processes put in place 
in order to deal with the new accounting and reporting rules in the most efficient way. 

Policy and procedure manuals should be updated to reflect the accrual framework, and dashboards 
can  be  developed  to  monitor  data  quality  and  system  outputs.  As  a  result,  new  standards  and 
processes will flow across the entire organisation. 

Process improvements may also leverage technology or involve transactional processing solutions. 
This  may  for  example  include  the  implementation  of  shared  service  centres  or  outsourcing 
arrangements that can handle complex transactions. 

Systems 

Alignment  and  close  communication  with  IT  work  streams  is  essential  for  a  smooth  project 
implementation.  In  addition,  the  use  of  common  accounting  systems  and  sharing  of  IT 
development  costs  by  several  entities  (where  feasible)  may  also  considerably  reduce  costs 
associated  to  the  systems  dimension.  Close  coordination  with  the  IT  team  is  an  important  key 
success factor. 

3.4.2. 

(Expected) benefits from accrual accounting reforms 

Accountability and transparency 

Applying  uniform  and  comparable  accruals-based  accounting  practices,  with  a  comprehensive 
reporting of all assets and liabilities for all sectors of general government within the EU, enhances 
the quality of the data on which ESA 2010 reporting is based and consequently improves budget 
surveillance and fiscal monitoring at macro level to enable sound fiscal policy decision-making. 
Comparability  will  be  improved  across  Member  States,  levels  of  government  and  individual 

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government entities. This element is crucial to meet the objectives of fiscal stability and deeper 
economic and financial integration within the EU. Transparency and comparability are viewed by 
the Member State respondents as the greatest benefits of EPSAS implementation. 

Furthermore, high-quality and transparent EPSAS financial statements that are aligned with best 
international  accounting  practices  (IPSAS)  increase  the  credibility  of  government  financial 
statements towards its citizens and other stakeholders, including investors in government bonds. 

More transparent financial reporting also serves to enhance democratic accountability as accruals-
based  financial  statements  provide  a  basis  to  enrich  parliamentary  debate  and  public  scrutiny. 
Progress has been demonstrated to this end in several Member States’ governments where such 
benefits are now being achieved as a result of prior accrual reforms. 

By contributing to the long-term sustainability of public finances, sound and transparent financial 
information and reporting constitute an important element of intergenerational fairness. 

Select illustrative examples demonstrating the impact of the use of accrual accounting on 
increased transparency and accountability 
•  Accruals-based  financial  statements  provide  a  comprehensive  picture  of  a  country’s 
public net worth, i.e., what the nation owns and what its obligations are. Information on 
assets, including fixed assets, forces to take conscious decisions on how well these assets 
are  managed,  therefore  enabling  sound  parliamentary  debates.  What  gets  shown  gets 
managed; 

•  Accrual accounting increases transparency and accountability by reflecting the true cost 
of public policy decisions in the financial statements and enables a sound debate about 
the appropriateness of such policies, for example the value of subsidies given indirectly 
through concessionary loans (i.e., loans at below-market rates), the risk associated with 
financial guarantees given, the costs associated with long-term liabilities, including those 
arising  from  onerous  financing  arrangements  and  employee  benefit  liabilities  such  as 
public pension liabilities; 

•  Accrual  accounting  reduces  the  scope  for  fiscal  illusions  using  buy-now-pay-later 
schemes  for  infrastructure  funding  or  through  the  sale  of  real  estate  and  other  non-
financial assets to raise immediate cash ‘revenue’. 

Better decision making 

Member States that implemented accrual accounting reforms 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.  To  do  this,  implementing  good  accrual  accounting  practices  is  a 
necessary  precondition.  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 assessment of the costs of public policies and programmes and 
evaluation of the outcomes against policy objectives.  

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Several  governments  also  developed,  to  their  satisfaction,  accruals-based  budgeting  systems  as 
management  tools  that  support  decision  making.  Those  governments  use  it  as  a  key  positive 
element  that brings greater alignment in  the way budgets  are made, government operations are 
managed, decisions are made and reporting is done as well as in evaluating actual results, which 
eventually informs the next budgeting cycle. 

The  benefits  captured  from  the  reforms  can  be  difficult  to  quantify,  but  significant  additional 
benefits can be expected if governments capitalise on robust accrual accounting systems and go 
beyond  what  is  necessary  to  comply  with  the  accounting  rules.  The  ability  to  satisfy  various 
reporting needs will be greater if the system is designed for this purpose. 

The benefits associated with accrual accounting may be viewed following various dimensions that 
interconnect with each other. Transparent and high-quality financial information, once available, 
may be used to strengthen accountability and inform decision-making by both external and internal 
users. Greater accountability and better decisions should stand, in turn, to contribute to improved 
policy outcomes for the benefit of all. 

Select  illustrative  examples  demonstrating  the  impact  of  the  use  of  accrual  accounting 
information for better decision making 
• 

Information  on  fixed  assets  (for  example  real  estate  properties,  infrastructure  assets) 
allows informed decisions regarding their use and maintenance. As major overhauls and 
component replacements are recorded as assets and depreciated, cost accounting is more 
accurate  and  it  is  possible  to  plan  maintenance  efforts  more  rationally  from  both  an 
economic and technical perspective, investments that are most critical to operations can 
be  prioritised,  leading  to  a  more  efficient  management  of  the  resources  and  cost 
reductions; 
Information about impairment of assets (receivables, including tax receivables, and other 
financial assets) gives better information on the recoverability of these assets and aids 
the planning of their collection; 
Information  about  receivables  and  payables  allows  better  cash  flow  management,  the 
cash flow statement can be used to make financial forecasts. 

• 

• 

•  Accrual accounting reforms can shift the focus of financial management away from an 
input-driven  system  toward  a  more  result-based  management  with  a  clear  focus  on 
outputs and outcomes. 

Impacts on controls and administrative processes 

Strong government accounting systems are essential for effective internal control and audit in the 
public  sector.  The  detailed  information  captured  under  accrual  accounting  provides  a  basis  for 
closer  monitoring  of  government  resources,  obligations  and  commitments  and  is  a  necessary 
starting point for public auditors to conduct an independent assessment of the financial position 
and performance of the government reporting entities. Common public accounting standards in the 

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EU would also facilitate harmonisation of government audit practices contributing to enhancement 
of the average audit quality within the EU. 

The modernisation of public accounting systems provides an opportunity to upgrade management 
information  systems  and  streamline  administrative  processes  to  increase  efficiency  in  public 
administration.  Governments  across  Europe  have  combined  the  accounting  modernisation  with 
wider financial reforms to achieve efficiencies across the wider finance function.  

Centralised transaction processing and, in some instances, the implementation of shared service 
centres constitute key components of the PFM reform. Increased administrative efficiency can be 
seen to generate a return on the initial investment through a reduction in processing time and lower 
administration costs in the individual reporting entities. With a more streamlined and automated 
reporting  system,  fewer  resources  are  required  for  transaction  processing  tasks  and  staff  may 
instead be used for value-added tasks such as data analysis and forecasting. 

Expected and achieved benefits 

Member  States  that  implemented  accrual  accounting  reforms  reported  that  overall,  the  main 
benefits expected from the reform were achieved, although some proved more difficult to achieve 
than others.  

According  to  respondents,  the  easiest  objectives  to  achieve  were  an  increased  efficiency  in 
producing  the  financial  statements,  the  implementation  of  risk  management  and  a  reduction  of 
administrative costs and burden. They also identified secondary benefits, such as the introduction 
of a continuous improvement process of public financial management, which could be expected 
to  endure  in  the  years  following  the  reform.  Overall,  respondents  confirmed  that  accrual 
accounting reforms enabled them to achieve the three key benefits listed above: accountability and 
transparency, better decision-making, and impacts on control and administrative processes. 

The  main  challenge  relates  to  the  use  of  accrual  data  by  managers  which  may  not  always  be 
widespread  enough  to  realise  the  full  potential  benefits  of  accrual  accounting  in  financial 
performance management.  The 2018 study identified three  actions that  can help  overcome this 
challenge:  

•  Facilitating the use of accrual accounting data by internal users. In order to achieve this 
objective, the following can help: the production of clear, stable and ad-hoc performance 
indicators to assist management decisions, having a sufficient number of financial experts 
acting  as  business  partners  in  operational  departments  and  making  financial  data  more 
accessible  to  decision-makers,  e.g.  through  the  use  of  state-of-the-art  data  visualisation 
tools; 

•  Helping  external  stakeholders  understand  and  use  accruals-based  financial  reports. This 
could include the publication of accruals-based financial statements on a timely basis (the 

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usefulness of financial statements is reduced if they are published late after the reporting 
date), actions  to  improve the financial literacy of key stakeholders,  the  reduction of the 
length of the financial statement disclosures (focusing on key information) and the use of 
practices that make the financial statements more understandable and more accessible to 
users (e.g., through online publication of didactic explanatory material); 

•  Bridging  the  gap  between  accruals-based  financial  statements,  cash-based  accounts  and 
statistical reports. Implementing accrual budgeting is the most efficient option as it brings 
consistency between accounting and budgeting, but it is not the approach followed by many 
governments (and is not a topic of the EPSAS project). Other measures that help meet this 
objective include reducing the differences between financial and statistical reporting to the 
greatest possible extent25, and explaining the differences that remain, providing bridging 
tables and explanations about the reconciliations between the various sets of rules. 

25 Please note that the IPSASB currently undertakes a project whose objective is to strengthen the linkages between 
IPSAS Standards and GFSM to help public sector entities maximize the extent to which they can draw on IPSAS 
Standards-based information in preparing statistical information that is used by decision-makers and for 
accountability purposes. 

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Annex 3.1. 2025 accounting maturity by country and 
government sector 

Belgium 
Bulgaria 
Czechia 
Denmark 
Germany 
Estonia 
Ireland 
Greece 
Spain 
France 
Croatia 
Italy 
Cyprus 
Latvia 
Lithuania 
Luxembourg 
Hungary 
Malta 
Netherlands 
Austria 
Poland 
Portugal 
Romania 
Slovenia 
Slovakia 
Finland 
Sweden 
Numerical average 

Central 

79% 
76% 
83% 
81% 
22% 
91% 
70% 
21% 
87% 
88% 
67% 
39% 
38% 
92% 
88% 
27% 
66% 
33% 
38% 
77% 
71% 
61% 
71% 
69% 
78% 
80% 
83% 
66% 

State 

77% 

32% 

85% 

77% 

68% 

Local 

Social 

73% 
76% 
83% 
72% 
62% 
91% 
79% 
38% 
85% 
87% 
68% 
39% 
85% 
94% 
88% 
32% 
66% 
94% 
58% 
77% 
71% 
70% 
71% 
69% 
78% 
85% 
91% 
73% 

67% 
70% 
72% 
72% 
34% 
89% 
62% 
19% 
67% 
92% 
42% 
14% 
8% 
88% 
78% 
74% 
56% 

78% 
61% 
58% 
64% 
38% 
33% 
52% 
63% 
71% 
59% 

General 
Government 
74% 
74% 
81% 
76% 
35% 
91% 
70% 
21% 
81% 
90% 
61% 
32% 
32% 
91% 
85% 
43% 
64% 
34% 
53% 
73% 
67% 
63% 
64% 
58% 
70% 
77% 
85% 

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61% 

29% 

State 
67% 

Social 
60% 
63% 
77% 
58% 
42% 
86% 
57% 
12% 
58% 
92% 
55% 
14% 
17% 
55% 
72% 
15% 
55% 

Annex 3.2. 2014 accounting maturity by country and 
government sector 
Central 
67% 
56% 
75% 
72% 
22% 
92% 
54% 
12% 
70% 
89% 
34% 
31% 
14% 
73% 
88% 
19% 
66% 
22% 
31% 
73% 
66% 
55% 
63% 
62% 
75% 
72% 
81% 
57% 

Belgium 
Bulgaria 
Czechia 
Denmark 
Germany 
Estonia 
Ireland 
Greece 
Spain 
France 
Croatia 
Italy 
Cyprus 
Latvia 
Lithuania 
Luxembourg 
Hungary 
Malta 
Netherlands 
Austria 
Poland 
Portugal 
Romania 
Slovenia 
Slovakia 
Finland 
Sweden 
Numerical average 

Local 
73% 
56% 
75% 
65% 
58% 
92% 
71% 
12% 
68% 
84% 
34% 
30% 
75% 
73% 
88% 
31% 
66% 
94% 
58% 
12% 
66% 
80% 
63% 
62% 
75% 
90% 
81% 
64% 

78% 
61% 
68% 
70% 
38% 
19% 
34% 
92% 
71% 
54% 

43% 

12% 

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Annex 3.3. Evolution of the accounting maturity by 
country and government sector between 2014 and 2025 

Belgium 
Bulgaria 
Czechia 
Denmark 
Germany 
Estonia 
Ireland 
Greece 
Spain 
France 
Croatia 
Italy 
Cyprus 
Latvia 
Lithuania 
Luxembourg 
Hungary 
Malta 
Netherlands 
Austria 
Poland 
Portugal 
Romania 
Slovenia 
Slovakia 
Finland 
Sweden 

State 
+10% 

+3% 

+24% 

+65% 

Central 
+12% 
+20% 
+8% 
+9% 
0% 
-1% 
+16% 
+9% 
+17% 
-1% 
+33% 
+8% 
+24% 
+19% 
0% 
+8% 
0% 
+11% 
+7% 
+4% 
+5% 
+6% 
+8% 
+7% 
+3% 
+8% 
+2% 

Local 
0% 
+20% 
+8% 
+7% 
+4% 
-1% 
+8% 
+26% 
+17% 
+3% 
+34% 
+9% 
+10% 
+21% 
0% 
+1% 
0% 
0% 
0% 
+65% 
+5% 
-10% 
+8% 
+7% 
+3% 
-5% 
+10% 

Social 
+7% 
+7% 
-5% 
+14% 
-8% 
+3% 
+5% 
+7% 
+9% 
0% 
-13% 
0% 
-9% 
+33% 
+6% 
+59% 
+1% 

0% 
0% 
-10% 
-6% 
0% 
+14% 
+18% 
-29% 
0% 

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Annex 3.4. 2030 projected accounting maturity by 
country and government sector 

Belgium 
Bulgaria 
Czechia 
Denmark 
Germany 
Estonia 
Ireland 
Greece 
Spain 
France 
Croatia 
Italy 
Cyprus 
Latvia 
Lithuania 
Luxembourg 
Hungary 
Malta 
Netherlands 
Austria 
Poland 
Portugal 
Romania 
Slovenia 
Slovakia 
Finland 
Sweden 
Numerical average 

Central 

79% 
77% 
90% 
81% 
22% 
91% 
76% 
88% 
86% 
88% 
67% 
89% 
86% 
92% 
89% 
72% 
66% 
93% 
38% 
77% 
71% 
94% 
71% 
69% 
83% 
80% 
83% 
78% 

State 

81% 

32% 

85% 

77% 

69% 

Local 

Social 

73% 
77% 
90% 
72% 
62% 
91% 
79% 
95% 
85% 
87% 
70% 
89% 
93% 
95% 
89% 
31% 
66% 
94% 
58% 
77% 
71% 
70% 
71% 
69% 
83% 
85% 
91% 
78% 

67% 
70% 
90% 
72% 
35% 
89% 
86% 
86% 
70% 
92% 
42% 
85% 
66% 
88% 
78% 
74% 
56% 

78% 
61% 
58% 
64% 
38% 
33% 
67% 
63% 
71% 
68% 

General 
Government 
76% 
75% 
90% 
76% 
35% 
91% 
77% 
88% 
81% 
90% 
61% 
88% 
81% 
92% 
86% 
69% 
64% 
93% 
53% 
73% 
67% 
83% 
64% 
58% 
79% 
77% 
85% 

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4.  Suitability of IPSAS for the Member States and their 

potential use for EPSAS 

4.1  Evolution of IPSAS since 2013 

Since 2013, the International Public Sector Accounting Standards Board® (IPSASB®) has made 
significant  changes  to  its  governance  and  oversight,  as  well  as  the  development  of  IPSAS® 
Standards.  These  changes  have  enhanced  the  standards  and  ensured  they  are  developed  in  the 
public interest. 

4.1.1. 

Governance and Oversight  

In 2014, the IPSASB Governance Review Group (Review Group) was set up by the IMF, OECD, 
World  Bank,  International  Organization  of  Supreme  Audit  Institutions  (INTOSAI),  Financial 
Stability Board and International Organization of Securities Commissions, who also comprised 
the Review Group members. The Review Group’s remit was to undertake a global consultation 
with stakeholders and make recommendations to strengthen the IPSASB’s governance processes 
and structures.  

Following  the  consultation,  the  Review  Group  published  the  results  of  its  work  by  making  a 
number  of  recommendations.  The  setting  up  of  the  Public  Interest  Committee  (PIC)  as  the 
governance  body  for  IPSASB  and  the  setting  up  of  the  IPSASB  Consultative  Advisory  Group 
(IPSASB CAG) were recommendations to enhance the governance and oversight processes.  

The PIC was set up in 2015 to ensure that the standard-setting activities of the IPSASB serve the 
public interest. The PIC is comprised of individuals with expertise in the public sector or financial 
reporting and professional engagement in organizations that have an interest in promoting high-
quality financial information. The PIC is composed of a member from each of the IMF, INTOSAI, 
OECD, and the World Bank. The activities of the PIC focus on oversight of due process, qualified 
and inclusive appointments, and relevant and timely standards.  

The IPSASB CAG was set up in 2016 to provide a forum for the IPSASB to consult and receive 
advice from representatives of public sector organizations, or individuals, that are interested in or 
affected by its  work, including those engaged in  the preparation, audit, or evaluation  of public 
sector financial reports, to obtain advice on: 

•  The IPSASB’s strategy and work program, including project priorities; 
•  Projects, including views on key technical issues or matters that may impede the adoption 

or effective implementation of IPSAS Standards; and 

•  Other matters of relevance to the standard-setting activities of the IPSASB. 

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Since their setting up, the PIC and the CAG have been integral to the IPSASB’s governance and 
oversight processes and standard-setting activities. 

4.1.2. 

IPSAS Standards 

Since  2013,  the  IPSAS  Standards  have  been  updated  to  provide  comprehensive  international 
guidance for public sector entities. This increased the number of standards from 31 in 2013 to 40 
in January 2025. This progress was driven by the issuance of 19 new numbered IPSAS Standards, 
including those: 

•  Addressing public sector-specific topics (for example, IPSASB 33, First-time Adoption of 
Accrual Basis IPSAS; IPSAS 40, Public Sector Combinations; IPSAS 42, Social Benefits; 
IPSAS 46, Measurement; and IPSAS 48, Transfer Expenses); and 

•  Replacing  IPSAS  Standards  to  update  the  requirements  for  public  sector  reporting  (for 
example,  IPSAS 39,  Employee  Benefits;  IPSAS  41,  Financial  Instruments;  IPSAS  43, 
Leases; IPSAS 45, Property, Plant, and Equipment; and IPSAS 47, Revenue). 

IPSAS Standards issued since 2013 have been increasingly focused on adding guidance relevant 
to  public sector financial reporting topics. As a  result, the degree of public sector focus of the 
IPSAS Standards has increased significantly, as shown in Figure 3. As of January 2025, 30% of 
IPSAS Standards are fully or almost fully public sector-specific, compared to 19% in 2013. 

Figure 3. IPSAS standards: degree of public sector focus 

The IPSAS Standards in 2025 cover all major areas of public sector transactions. Figure 4 shows 
IPSAS standards organized by topic to highlight their comprehensive coverage of public sector 

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financial reporting. The complete list of IPSAS standards is included in Annex 4.1, whereas Annex 
4.2 lists IPSASs issued after 2012. 

Figure 4. IPSAS standards by topic 

In addition to the progress and development of IPSAS Standards, there have also been a number 
of important developments in the literature published by IPSASB since 2013. The most significant 
development  was  the  publication  of  The  Conceptual  Framework  for  Public  General  Purpose 
Financial  Reporting  by  Public  Sector  Entities  (conceptual  framework)  in  2014,  which  was 
subsequently  updated  in  2023.  The  conceptual  framework  has  provided  the  conceptual 

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General PrinciplesIPSAS 3, Accounting Policies, Changes in Accounting Estimates, and Errors IPSAS 4, The Effects of Changes in Foreign Exchange Rates IPSAS 10, Reporting in Hyperinflationary Economies IPSAS 14, Events after the Reporting Date IPSAS 46, Measurement Other Expenses and Non-Financial LiabilitiesIPSAS 19, Provisions, Contingent Liabilities, and Contingent AssetsIPSAS 32, Service Concession Arrangements: GrantorIPSAS 39, Employee Benefits IPSAS 42, Social Benefits IPSAS 49, Retirement Benefit PlansRevenue and Transfer ExpensesIPSAS 47, Revenue IPSAS 48, Transfer Expenses Financial Assets and LiabilitiesIPSAS 28, Financial Instruments: Presentation IPSAS 29, Financial Instruments: Recognition and MeasurementIPSAS 30, Financial Instruments: Disclosures IPSAS 41, Financial InstrumentsAccounting BoundariesIPSAS 34, Separate Financial Statements IPSAS 35, Consolidated Financial Statements IPSAS 36, Investments in Associates and Joint Ventures IPSAS 37, Joint Arrangements IPSAS 38, Disclosure of Interests in Other EntitiesIPSAS 40, Public Sector Combinations Non-Financial AssetsIPSAS 5, Borrowing Costs IPSAS 12, Inventories IPSAS 16, Investment Property IPSAS 21, Impairment of Non-Cash-Generating Assets IPSAS 26, Impairment of Cash-Generating Assets IPSAS 27, Agriculture IPSAS 31, Intangible Assets IPSAS 43, LeasesIPSAS 44, Assets Held for Sale and Discontinued Operations IPSAS 45, Property, Plant, and Equipment IPSAS 50, Exploration for and Evaluation of Mineral ResourcesFinancial StatementsIPSAS 1, Presentation of Financial Statements IPSAS 2, Cash Flow Statements IPSAS 22, Disclosure of Financial Information about the General Government Sector IPSAS 24, Presentation of Budget Information in Financial Statements Disclosure and Other StandardsIPSAS 18, Segment Reporting IPSAS 20, Related Parties 
 
 
underpinning for the IPSASB’s standard-setting since 2014, ensuring that topics are considered 
through the public sector financial reporting lens. 

Further, the IPSASB’s work is increasingly focused on the needs of the public sector and ensuring 
the IPSAS Standards are adopted and implemented. This is why the recently published 2024-2028 
Strategy and Work Program26 includes a focus on maintenance activities to add new mechanisms 
to:  

•  Provide a process for those applying IPSAS Standards to share queries for consideration 
by the IPSASB Application Group (IAG), which will be set up in 2025. Queries submitted 
to the IAG open a new mechanism to develop timely amendments to IPSAS Standards and 
other non-authoritative guidance to help ensure their consistent application; 

•  Establish a Post-Implementation Review (PIR) process to ensure that IPSAS Standards are 
operating as designed and providing relevant information to public sector users. The PIR 
process formalizes a mechanism to consult stakeholders to inform the IPSASB’s standard-
setting activities.  

4.2  Application of IPSAS by EU Member States 

This section presents the current state of play in respect of the application of IPSAS in different 
accounting areas by the EU-27 Member States at the central government level. Less information 
is available on state and local governments and social security funds. 

Figure 5 gives an overview of the average accounting maturity score per accounting area across 
the EU-27 central governments; it shows how closely the accounting areas are aligned with IPSAS 
requirements.  

26 Since 2013, the development of the standard-setting work program has been guided by three consultations with 
constituents on the IPSASB Strategy and Work Program. This ensure that the standard-setting activities and Work 
Program includes the relevant items to global public sector stakeholders.  

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Figure 5. Average accounting maturity per accounting area across the EU 

Inventories

Fixed assets

Intangible assets

Provisions

Accruals and expenses

Reporting

Consolidation

Financial instruments

Revenue

Employee benefits

85%

81%

72%

65%

61%

58%

57%

57%

52%

40%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Accounting  for  inventories  has  the  highest  application  on  average  whereas  employee  benefits 
accounting  has  the  lowest  application,  indicating  that  most  central  governments  do  not  apply 
IPSAS 39 principles on defined benefit accounting schemes. 

Figure 6. Disclosures included in the government's financial statements across the EU 

Very detailed disclosures
Detailed disclosures
Some disclosures
Very few or no disclosures

2

2

0

4

4

7

14

6

10
8
Number of countries

12

14

16

The volume of information presented as disclosures in the notes to the financial statements varies 
widely from country to country. 21 central governments report detailed (14) or very detailed (7) 
disclosures. These governments are likely to be better prepared for a transition to IPSAS or EPSAS 
(better  data  availability,  etc.)  than  those  which  provide  no  or  only  some  disclosures  in  their 
financial statements. 

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Figure 7. Harmonisation across entities in the EU 

Harmonised accounting policies

Standardised reporting formats

Standard chart of accounts

0

5

20

21

25

25

30

10

15
Number of countries

20

Once the consolidation scope is defined, an efficient consolidation process that enables timely and 
reliable reporting by all entities in the consolidation scope needs to be put in place. As shown in 
Figure 7, best practices such as the use of standardised reporting formats (21 central governments), 
a standard chart of accounts (25 central governments), as well as harmonised accounting policies 
(20 central governments) are already widely implemented. 

Figure 8. Number of governments maintaining a physical inventory of fixed assets in the EU 

Land

Buildings

Infrastructure assets

Military assets

Heritage assets

IT equipment

Other

26

25

24

27

25

25

0

5

10

15
Number of countries

19

20

25

30

As shown in Figure 8, the vast majority of central governments maintain a physical inventory of 
land,  buildings,  infrastructure  assets,  military  assets  and  IT  equipment.  For  those  central 
governments  which  do  not  hold  a  comprehensive  inventory  of  fixed  assets,  the  effort  and 
complexity of the data collection exercise for financial statements will be significant.  

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Figure 9. Number of governments recognising fixed assets in the statement of financial position 
in the EU 

Land

Buildings

Infrastructure assets

Military assets

Heritage assets

IT equipment

Other

21

20

20

20

20

19

17

0

5

10

15

20

Number of countries

In addition, not all entities which maintain a physical inventory of assets recognise those in their 
financial statements. 

Figure  10.  Number  of  governments  recognising  assets  held  under  service  concession  and/or 
PPP arrangements in the statement of financial position in the EU 

Buildings

6

4

5

5

Infrastructure assets

2

3

8

6

Using ESA 95/ ESA 2010 rules

Using IPSAS 32 rules

Using another method

No recognition

0

5

10

15

20

25

Number of countries

Respectively 20 and 19 central governments report holding of buildings and infrastructure assets 
under service concession arrangements and/or  public-private partnerships (PPPs). Out of those, 
only  4  (for  buildings)  and  3  (for  infrastructure  assets)  declare  recognising  such  assets  in  the 
statement of financial position using the IPSAS 32 rules, which reflects a significant gap inside 
the EU in the application of IPSAS 32. Under IPSAS, recognition of the asset by the grantor (i.e. 
the public sector entity) is based on whether it controls that asset and not on whether it bears the 
risks and rewards related to it (as under ESA rules). All facts and circumstances of the arrangement 
should be considered in making this assessment. 

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Figure 11. Timing of recognition of exchange transactions in the EU  

The budgetary commitment is made

1

The service is performed or good received

The invoice is received

3

The payment is made

7

0

2

4

8

12
6
Number of countries

10

16

14

16

18

The accounting treatment of accruals and expenses varies widely from country to country. With 
regards to the timing of recognition of exchange transactions, 16 countries out of 27 recognise the 
accounting transaction when the service is carried out or the good received, as required by accrual 
accounting. 

Figure  12.  Timing  of  recognition  of  expenses  from  grants  and  other  transfers  in  the  EU 

The budgetary commitment is made

1

The invoice or cost claim is received

Cash payment is made

The transfer recipient satisfies its obligations in the
binding arrangement (or immediately if there is no…

0

2

4

6

6

6

8
Number of countries

10

14

12

14

16

Only 6 central governments out of 27 recognise expenses from grants and other transfers when the 
transfer recipient satisfies its obligations in the binding arrangement (or immediately if there is no 
binding arrangement). Most governments recognise expenses when cash is paid. 

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Figure 13. Timing of recognition of social benefits in the EU  

The right of individuals to receive the next benefit is
established

Cash payment is made

11

0

2

4

6

8

12
Number of countries

10

16

14

16

18

As  regards  the  timing  of  recognition  of  social  benefits,  only  11  central  governments  out  of  27 
consider the moment at which the right of individuals to receive the benefit is established, whereas 
16 central governments recognise at the moment when the cash payment is made. 

Figure 14. Timing of recognition of pension expenses for defined benefit pension schemes in 
the EU 

Following the projected unit credit method

5

Following another accrual basis of accounting

3

When payment is made

13

0

2

4

6

8

10

12

14

Number of countries

21  central  governments  out  of  27  have  confirmed  that  defined  benefit  pension  schemes  (or 
equivalent) are present for civil servants/government employees. Out of those 21, only 8 countries 
recognise defined benefit pension liabilities in the statement of financial position. 5 EU central 
governments recognised defined benefit schemes following the projected unit credit method, and 
3 follow another accrual basis of accounting. 

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Figure 15. Timing of recognition of revenue from taxes in the EU 

Personal income tax

13

10

2

2

Cash is received

Corporate tax

14

11

1

1

Taxes are declared (tax return /
social declaration)

VAT and indirect taxes

13

10

2

2

Based on ESA 2010 ("time
adjusted cash")

Social contributions

15

7

1

0

5

10

15

20

25

30

Revenue attributed to the taxation
period and asset recognised based
on (year-end) estimates and using
macro-economic indicators or
historical trends/data

Figure 15 shows how central governments recognise revenue from four different type of taxes, 
namely personal income tax, corporate tax, VAT and indirect taxes and social contributions. Many 
central governments recognise such revenue when cash is received. Very few central governments 
base the recognition of revenue from taxes on the ‘time adjusted cash’ method, or attribute the 
revenue to the taxation period, with asset recognition based on (year-end) estimates and the use of 
macro-economic indicators or historical trends/data. No central government already applies the 
new revenue standard (IPSAS 47) which becomes effective for reporting periods started on or after 
1 January 2026. 

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Figure 16. Timing of recognition of revenue from transfers in the EU 

Transfers received from other
levels of government

5

15

5

1

Transfers received from
international donors, the EU, etc.

6

12

7

2

0

10

20

30

Number of countries

The enforceable right to receive
the transfer is established

Cash is received

The compliance obligation in the
binding arrangement is satisfied

Other method

When it comes to recognition of revenue from transfers, most central governments consider the 
moment cash is received as timing of recognition. No central government already applies the new 
revenue standard (IPSAS 47) which becomes effective for reporting periods starting on or after 1 
January 2026. 

Figure 17. Measurement of loans and borrowings in the EU 

Loans

Borrowings

13

14

0

5

12

11

10

15
Number of countries

20

Amortised cost

Other method

25

30

14 central governments account for borrowing and 13 for loans using the amortised cost method. 
The  amortised  cost  method  is  the  measurement  method  prescribed  by  IPSAS  for  loans  and 
borrowing. It uses the effective interest rate, which is the rate that exactly discounts future cash 
payments or receipts throughout the expected life of the financial asset or liability. 

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Figure 18. Measurement of derivatives in the EU  

Off balance sheet

At fair value

Using another method

0

1

2

3

6

7

9

7

8

9

10

4

5
Number of countries

6

Currently 22 out of 27 central governments declare that they use derivatives; of these, 16 recognise 
them on the balance sheet, out of which seven account for derivatives at fair value. Six central 
governments do not recognise derivatives on their balance sheet. 

Figure 19. Accounting for financial guarantees in the EU 

A liability when the probability of payment is
greater than 50%

A liability initially measured at fair value

2

An expense at the time cash payment is made to the
beneficiary

0

2

10

13

12

14

6

4
10
Number of countries

8

Under  IPSAS,  financial  guarantee contracts  that  are treated as  financial instruments, should be 
measured by the issuer at fair value on initial recognition. Only two central governments account 
for financial guarantees as a liability initially measured at fair value. 13 central governments do 
not  reflect  the risk associated with  the guarantees issued in  their financial  position, even if the 
probability that they will need to pay is greater than 50%. 

In conclusion, the findings in this section highlight that while accounting maturity reflected on 
accounting  areas  is  quite  high,  in  the  national  financial  accounting  frameworks  in  the  EU  the 
biggest gap to IPSAS remains in reporting on employee benefits, while there are some gaps still 
in reporting, consolidation, accruals, revenue recognition and financial instruments.   

While nearly all MS use a harmonised Chart of Accounts, about 25% lack consistent reporting 
formats or accounting policies. This can be illustrated by the fact that the accounting treatment of, 
for  example,  service  concessions  is  not  performed  by  using  IPSAS  methodology  but  other 
methods.  In  the  areas  of  revenue,  for  transfers  (including  social  benefits  and  pensions)  and 
provisions a majority of MS use a cash related approach to the recognition of these transactions. 

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Regarding the accounting for financial instruments, it can be observed that only about half of the 
MS  measure  their  loans  and  borrowings  at  amortized  cost,  while  the  other  half  uses  other 
methodologies. In the case of derivatives only 25% of MS apply a fair value measurement while 
the  others  either  do  not  recognise  derivatives  on  their  books  or  apply  a  different  method.  This 
illustrates that the current gaps of IPSAS application in MS is focused on particular accounting 
areas. 

4.3  Screening of IPSAS standards on their suitability for developing 

EPSAS 

Between 2019 and 2023, the Commission (Eurostat) performed a screening of all available IPSAS 
Standards,  in  cooperation  with  the  Member  States.  The  screening  focused  on  the  following 
elements: 

•  Whether  the  IPSAS  meets  the  qualitative  characteristics  of  the  EPSAS  Conceptual 

Framework (CF). 

•  Assessing differences to other common European public sector accounting frameworks to 

determine the impact of the standard on alignment and cost of implementation.  

The screening process involved in-depth evaluations of each IPSAS, focusing on their conceptual 
alignment with the draft EPSAS framework, their ability to meet the qualitative characteristics of 
relevance,  reliability,  and  comparability,  and  their  overall  contribution  to  the  European  public 
good.  Each  standard's  potential  for  enhancing  public  sector  financial  reporting  was  weighed 
against the costs and challenges of implementation, with recommendations for additional guidance 
where necessary. 

All  IPSAS  Standards up to  IPSAS  42 were screened, except  for those which had already been 
superseded at the time the screening was performed.  

Table  6  presents  a  high-level  summary  of  the  screening  results,  the  detailed  reports  are  made 
publicly available online at the EPSAS Expert Group Library27.  

27https://circabc.europa.eu/ui/group/8b9f731d-4826-4708-9069-5f65a9edc9bf/library/f4065ef7-a107-4263-a5a7-
01cdc4c76b97?p=1&n=10&sort=modified_DESC 

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Table 6. Screening of IPSAS standards 

Screening Paper 
IPSAS 01 
Presentation of 
Financial Statements 

Date 
November 
2021 

Main points assessed 
•  Conceptual differences between IPSAS 

1 and EPSAS CF 

•  Alignment with principles such as going 

IPSAS 02 Cash Flow 
Statements 

November 
2019 

concern and consistency 

•  Need for additional guidance on 
presentational sensitivity and 
differential reporting 

•  Differences between IPSAS 1 and other 
frameworks like ESA 2010 and IFRS 
•  Evaluation of IPSAS 2's alignment with 

the EPSAS CF 

•  Cash flow statements categorization 

into operating, investing, and financing 
activities 

•  Focus on qualitative characteristics: 

relevance, reliability, and comparability 

•  Discussion about direct and indirect 
methods for reporting operating cash 
flows 

•  Alignment with IFRS and EU 

Accounting Rules 

Conclusion (Summary) 
• 

Some conceptual differences exist, such as the lack of a definition for 
net financial position. 

•  Aligning IPSAS 1 with other international frameworks could reduce 
compliance costs and recommends additional guidance in areas like 
asset and liability presentation are suggested. 

•  Overall IPSAS 1 would enhance public sector financial reporting, 

with benefits outweighing implementation costs. 

IPSAS 2 'Cash flow statements' is well-aligned with the EPSAS CF.  

• 
•  The standard provides flexibility through using either the direct or 

indirect method for cashflow reporting, comparability remains high. 
Disclosure of a reconciliation of surplus or deficit to operating cash 
flows is recommended.  
Implementation involves moderate one-off costs but is generally 
cost-neutral, thereby improving the quality of financial reporting.  
IPSAS 2 is considered beneficial to the European public good, it 
enhances financial reporting transparency without negative impacts. 

• 

• 

November 
2021 

IPSAS 03 
Accounting Policies, 
Changes in 
accounting estimates 
and errors 

•  Evaluation of alignment with the 

•  The application of IPSAS 3 would create relevant, reliable, and 

EPSAS CF 

•  Policy development without specific 
IPSAS and preventing assumptions 
about past management intentions 
•  IPSAS 3‘s alignment with frameworks 

like IFRS 

•  Additional guidance needs on estimates 

and error correction  

comparable financial information for economic decision-making 
within EU. 

•  The standard aligns with the principles of providing a true and fair 
view, while promoting the European public good through enhanced 
transparency.  

•  Additional guidance in specific areas, such as the use of reasonable 
estimates and the criteria for determining the impracticability of 
retrospective applications is suggested.  

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IPSAS 04 Effect of 
Foreign Exchange 
rates 

March 
2020 

• 

• 

• 

IPSAS 4 focus on foreign exchange 
rate effects and its alignment with 
qualitative characteristics  
Inclusion and translation of foreign 
currency transactions and operations 
in financial statements 
IPSAS 4’s alignment with frameworks 
like ESA 2010, IFRS, and EU 
Accounting Rules 

• 

IPSAS 4 upholds the true and fair view principle, reinforcing its 
contribution to the European public good.  

•  Guidance on specific areas such as judgment in financial reporting 
and translation of equity items could enhance consistency in 
application across EU member states.  

•  Overall IPSAS 4 is conducive to maintaining financial stability and 

growth in the European economy. 

IPSAS 05 Borrowing 
Cost 

April 2021 

•  Capitalisation of borrowing costs 
•  IPSAS 5’s alignment with the 

qualitative characteristics of the draft 
EPSAS framework 

•  Promotion of improved financial 

reporting and comparability across EU 
Member States 

• 

• 

IPSAS 5 is expected to be cost-neutral in the long term, with only 
moderate initial costs for governments opting to capitalise borrowing 
costs.  

•  The standard aligns well with the qualitative characteristics of the 

draft EPSAS CF 
IPSAS 5 is conducive to the European public good, promoting 
transparency and aiding in the assessment of management 
stewardship. 

IPSAS 09 Revenue 
from exchange 
transactions28 

November 
2021 

•  Criteria for revenue recognition and 

alignment with international 
frameworks like IFRS and EU 
Accounting Rules 
• 
IPSAS 9's relevance and reliability 
•  Reduction of dual reporting burdens in 

•  Potential one-off implementation costs, but benefits of improved 
financial reporting are anticipated to outweigh these expenses, 
contributing positively to the European public good.  

•  Additional guidance on distinguishing between exchange and non-

exchange transactions maybe necessary.  
IPSAS 9 aligns with the qualitative characteristics of the EPSAS CF. 

• 

the public sector 

IPSAS 10 Financial 
reporting in hyper-
inflationary 
economies 

June 2021 

•  Alignment with the true and fair view 

•  While IPSAS 10 may not be immediately relevant for EU countries, 

• 

principle 
IPSAS 10’s strong framework for 
hyperinflationary economies 

•  Consistent application  
•  Future EPSAS development for 

IPSAS 10 

• 

it offers a robust framework for hyperinflationary contexts, 
necessitating additional guidance for consistent application. 
IPSAS 10 is a foundation for developing an equivalent EPSAS, 
ensuring enhanced comparability and financial reporting across the 
EU. 

28 Meanwhile superseded by IPSAS 47 Revenue. 

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IPSAS 11 
Construction 
contracts 

September 
2021 

• 

IPSAS 11‘s alignment with the 
EPSAS CF  

•  The standard's recognition and 

disclosure requirements with focus on 
comparability 

IPSAS 12 
Inventories 

January 
2021 

IPSAS 13 Leases29 

October 
2020 

• 

IPSAS 12's alignment with the EPSAS 
CF with focus on inventory 
measurement and disclosure in the 
public sector 

•  Systematic cost allocation and 
comprehensive disclosure of 
inventory-related transactions 

•  Consistency and alignment with other 
frameworks like ESA 2010 and IFRS 
•  Alignment of IPSAS 13 with IFRS 16 

• 

with focus on lease accounting 
Importance of providing relevant 
information on lease transactions 

IPSAS 14 Events 
after reporting date 

November 
2021 

•  Distinction between adjusting and 
non-adjusting events after the 
reporting date 
IPSAS 14’s alignment with 
international frameworks 

• 

• 

IPSAS 11 is in line with true and fair view, its applicability in the 
public sector remains limited due to the infrequency of public entities 
acting as long-term construction contractors.  

•  Further analysis recommended regarding the option to reduce 

• 

• 

incidental revenue from costs related to specific contracts, as this 
may affect comparability.  
IPSAS 11 can serve as a foundational reference for developing a 
corresponding EPSAS standard. 
IPSAS 12 is conducive to the European public good, as it supports 
improved financial reporting without adverse effects on the European 
economy.  

•  Adopting IPSAS 12 as a foundation for developing an equivalent 

EPSAS standard is recommended to achieve consistent application 
and comparability across the EU. 

•  Adoption of a control-based approach for lessees enhances 

consistency and transparency, addressing previous criticisms of lease 
accounting models.  

•  Risks and reward model is retained for lessors, enhanced disclosure 

requirements ensure adequate information about lessors' risk 
exposures.  

•  Alignment with IFRS 16 is conducive to the European public good, 

• 

• 

improving financial reporting and supporting economic decisions. 
Implementation costs are minimal, and the benefits, including 
improved transparency and management assessment, outweigh these 
costs.  
IPSAS 14 aligns with the qualitative characteristics of the EPSAS 
CF, ensuring that financial statements are both understandable and 
timely. 

29 Meanwhile superseded by IPSAS 43 Leases. 

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IPSAS 16 Investment 
property 

October 
2020 

•  Challenges in consistent application 
due to varying valuation practices 
IPSAS 16‘s alignment with other 
frameworks like ESA 2010 and IFRS 

• 

IPSAS 17 Property, 
plant and 
equipment30 

November 
2019 

•  Adoption of private sector practices 

for the public sector 

•  Comparison of IPSAS 17 with 

international frameworks like IFRS 
and ESA 2010 

•  Discussion about reliability of 

historical cost measurement and the 
optional recognition of heritage assets 

IPSAS 18 Segment 
reporting 

May 2021 

•  Challenges in segment reporting for 

• 

government entities 
IPSAS 18's limitations in relevance 
and comparability 

•  Alignment with frameworks like ESA 
2010, IFRS, and EU Accounting 

IPSAS 19 
Provisions, 
Contingent liabilities 
and contingent assets 

March 
2020 

• 

IPSAS 19's requirements for 
recognition, classification, 
measurement, presentation, and 
disclosure 

•  Practical implementation challenges, 

especially from cash-based accounting 

• 

• 

IPSAS 14 is a valuable addition to the EU's financial reporting 
standards, promoting economic stability and growth without any 
adverse effects.  
IPSAS 16 adoption is deemed conducive to the European public 
good, no adverse effects on financial stability or economic growth 
expected.  

•  Additional guidance on the cost versus fair value model may be 

• 

• 

beneficial for consistent application and enhanced comparability.  
IPSAS 16 serves as a robust foundation for future EPSAS 
development, with minor adaptations. 
IPSAS 17 is largely consistent with existing frameworks such as 
IFRS and ESA 2010 

•  Additional guidance may be necessary to address specific areas like 
heritage assets and to ensure consistent application across different 
jurisdictions.  

•  The choice between the cost model and revaluation model for 
subsequent measurements is highlighted as a significant factor 
influencing comparability and requires careful consideration. 
•  The potential for improved alignment with internal reporting 

structures and COFOG classification suggests that a revised standard 
could offer more pertinent information for users.  

•  Despite the challenges and costs associated with its implementation, 

IPSAS 18 does not pose any adverse effects on the European 
economy, making it conducive to the European public good.  

•  Therefore, while IPSAS 18 has its limitations, it remains a valuable 

tool for enhancing financial transparency and comparability in the 
public sector. 
IPSAS 19 is not contrary to the true and fair view principle, thereby 
promoting the European public good.  

• 

•  To enhance consistency in financial reporting, additional guidance on 

the selection of discount rates and classification is advisable. 
Practical challenges in implementation, particularly in transitioning 
from cash-based accounting, should be addressed. 

30 Meanwhile superseded by IPSAS 45 Property, plant and equipment. 

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IPSAS 20 Related 
party disclosures 

October 
2021 

•  Benefits of increased transparency and 

comparability despite of high 
implementation costs 
IPSAS 20’s alignment with the true 
and fair view principle 

• 

IPSAS 21 
Impairment of non-
cash generating 
assets 

October 
2020 

•  Evaluating IPSAS 21's consistency 
with focus on non-cash-generating 
asset impairment in the public sector 
•  Requirements of public sector entities 
to assess impairment indicators and 
conducting tests to estimate the 
recoverable service amount 

• 

• 

IPSAS 19 is a valuable foundation for EPSAS, with potential for 
further refinement to meet the specific needs of the EU public sector. 
IPSAS 20 implementation may incur substantial costs, the benefits 
are expected to outweigh these expenses. The standard aligns with 
the European public good by not adversely affecting financial 
stability or economic growth, and it supports the true and fair view 
principle.  

•  To ensure consistent application across the EU, additional guidance 
on specific disclosures may be beneficial, particularly concerning 
transactions with key management personnel and their close family 
members. 

•  The implementation of IPSAS 21 is expected to incur moderate one-
off costs but will be cost-neutral in the long term, offering significant 
conceptual benefits.  

•  The standard aligns well with existing frameworks and does not pose 
any adverse effects on the European economy, thereby supporting the 
European public good.  

•  Additional guidance may be particularly beneficial in areas involving 

•  Comprehensive coverage of non-cash-

judgment and estimates related to asset impairment. 

May 2021 

IPSAS 22 Disclosure 
of financial 
information about the 
general government 
sector31 

generating fixed assets 

•  Reconciliation of financial data 
between IPSAS and ESA 2010 
•  Additional EU-specific guidance to 

improve its consistency and 
applicability across member states 
•  Disclosure of general government 

sector information 

•  The standard's ability to reconcile financial information between 

IPSAS and ESA 2010 reporting frameworks is particularly beneficial 
for macroeconomic analysis and decision-making.  

•  While IPSAS 22 is conducive to the European public good, 

additional guidance may be warranted to ensure that the information 
is tailored to the EU context and to facilitate comparisons among 
Member States. 

•  Overall, IPSAS 22 serves as a robust foundation for developing an 

equivalent EPSAS standard, with potential improvements to address 
specific EU requirements. 

31 Further information provided during the EPSAS Expert Group meeting: there was a recognized need to reconcile the financial accounting and ESA 2010 reporting 
frameworks. IPSAS 22 and/or IPSAS 18, or modified versions thereof, could be highly instrumental in achieving this objective, particularly for reconciliation 
between the whole of government accounts and the ESA 2010 aggregates. Examples from several countries demonstrated the feasibility of reconciling whole of 
government accounts with ESA 2010 aggregates. 

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IPSAS 23 Revenue 
from non-exchange 
transactions (Taxes 
and transfers)32 

November 
2021 

November 
2021 

IPSAS 24 
Presentation of 
budget information 
in financial 
statements 

•  Guidance on statistical models to 

• 

ensure reliability 

•  Additional guidance in distinguishing 
transaction types and recognizing 
services in-kind 
Implementing IPSAS 23 to improve 
public sector financial reporting 

• 

•  Key qualitative characteristics such as 

• 

relevance, reliability, and 
comparability 

•  Benefits for the European public good 
•  Focusing on refining presentation and 

disclosure options 

IPSAS 26 
Impairment of cash 
generating assets 

October 
2020 

• 

•  Alignment with the EPSAS CF 
qualitative characteristics 
Inconsistencies in distinguishing 
between cash-generating and non-
cash-generating assets 
•  Suitability for adoption  

IPSAS 23 promotes transparency and supports the true and fair view 
principle, enhancing the overall quality of general-purpose financial 
reports. Nonetheless, additional guidance, particularly on tax 
assessments and revenue recognition for grants, is necessary to 
improve understandability and comparability.  

•  The standard emphasizes timely revenue recognition, which aligns 
with the goal of providing relevant information for accountability.  

•  While IPSAS 23 is a robust framework, its successful integration 

requires careful development of supplementary guidelines tailored to 
the EU context. 
IPSAS 24 supports the qualitative characteristics of relevance, 
reliability, and comparability 

•  Additional guidance to address practical challenges, particularly 
when financial statements and budgets are not prepared on a 
comparable basis is needed. Establishing clear definitions of actual 
amounts and reinforcing the importance of presenting budget 
information as a separate financial statement could significantly 
improve comparability.  

•  The implementation of IPSAS 24 is conducive to the European 

• 

• 

public good, as it improves financial reporting without adversely 
affecting the European economy 
IPSAS 26 may involve judgment, particularly in distinguishing 
between cash-generating and non-cash-generating assets, the 
provision of detailed disclosures might mitigate potential 
inconsistencies.  
IPSAS 26 is deemed suitable for implementation with minimal 
adaptations, offering significant benefits in terms of improved 
financial reporting and accountability within the EU public sector.  

32 Further information provided during the EPSAS Expert Group meeting: IPSAS aims to align recognition with the underlying economic event but acknowledged 
that practical implementation may involve different methods and a combination of approaches. It was also pointed out that IPSAS 23 includes implementation 
guidance to assist with this process. 
Meanwhile superseded by IPSAS 47 Revenue.  

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IPSAS 27 
Agriculture 

May 2021 

•  Additional guidance for consistent 

IPSAS 31 Intangible 
Assets33 

October 
2020 

• 

• 

application across EU Member States 
Judgment and estimates in IPSAS 27 

IPSAS 31’s alignment with the draft 
EPSAS framework 

•  Needs for more guidance on public 
sector-specific intangibles like 
emission rights 

IPSAS 32 Service 
concession 
arrangements: 
grantor 

October 
2020 

• 

IPSAS 32‘s alignment with the draft 
EPSAS framework 

•  Benefits for the European public good 
•  Additional guidance on control 

approach, presentation and needs for 
consistent application across the EU 

IPSAS 33 First time 
adoption of accrual 
basis IPSAS34 

November 
2021 

•  Reliefs for first-time adopters using 

deemed cost 

•  Additional guidance and a staged 

approach to address the challenges 
posed by IPSAS 33 

• 

• 

• 

• 

• 

• 

IPSAS 27 is conducive to the European public good, the report 
suggests that additional guidance in certain areas may be beneficial 
to ensure consistent application across EU Member States.  
IPSAS 27 serves as a robust foundation for developing an equivalent 
EPSAS standard, with minor adaptations to address specific regional 
needs. 
IPSAS 31 provides a robust framework for the recognition, 
measurement, and disclosure of intangible assets, additional guidance 
on specific public sector intangibles, such as emission rights and 
rights arising from sovereign power, would enhance its applicability.  
IPSAS 31 is conducive to the European public good, as it improves 
financial transparency and comparability across EU Member States.  
IPSAS 31 serves as a suitable reference for developing future EPSAS 
standards, with minor adaptations to address sector-specific needs. 
IPSAS 32 is conducive to the European public good, as it improves 
financial reporting without adverse effects on the EU.  

•  To ensure consistent application and comparability across the EU, 
additional guidance on specific areas such as control approach, 
presentation, and disclosures may be necessary.  

•  The implementation of IPSAS 32 is positive for harmonized and 
transparent financial reporting framework within the European 
Union. 
IPSAS 33 offers significant conceptual merits, particularly in terms 
of the use of deemed cost, it presents challenges during the transition 
period that may affect the quality of financial statements.  
•  The reliefs provided, although beneficial for first-time adopters, 

• 

could hinder the achievement of key qualitative characteristics such 
as relevance, faithful representation, and completeness.  

33 There seems to be a demand for more detailed guidance concerning rights associated with sovereign powers. This encompasses areas like emission trading 
schemes  and  electromagnetic  spectra,  which  may  necessitate  customized  approaches  to  address  their  distinct  characteristics  within  public  sector  accounting 
frameworks. 
34 For voluntary IPSAS implementation, IPSAS 33 can serve as the guiding framework instead of creating new guidance or approaches for first-time 
implementation. Additionally, a three-year timeline for EPSAS standard-setting appears feasible only if EPSAS closely aligns with IPSAS. 

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IPSAS 34 Separate 
financial statements 

October 
2021 

•  Weighing the benefits of improved 
transparency and accountability 
against the potential costs 
•  Alignment with key qualitative 

• 

characteristics 
IPSAS 34‘s contribution to the 
European public good 

• 

• 

• 

It is recommended that the EPSAS standard-setting process considers 
additional guidance and a staged approach. 

IPSAS 34 does not mandate the preparation of separate financial 
statements, it offers a robust framework for entities that choose to do 
so, ensuring transparency and accountability.  
IPSAS 34 is conducive to the European public good, promoting 
improved financial reporting and economic stability across EU 
Member States. 

IPSAS 35 
Consolidated 
financial statements 

May 2021 

•  Alignment with the draft EPSAS 

•  The control-based approach of IPSAS 35 ensures a comprehensive 

framework 

•  Control-based approach and economic 

representation of the economic entity's financial position, enhancing 
transparency and accountability in public sector reporting.  

entity's financial position 

•  While the implementation may pose initial challenges, the long-term 

•  Long-term benefits of improved 

financial reporting and alignment with 
international standards 

IPSAS 36 Investment 
in associates and 
joint ventures 

September 
2020 

•  The equity method’s accurate 

reflection of the economic realities of 
investments 

•  Benefits of IPSAS 36 

IPSAS 37 Joint 
Arrangements 

September 
2020 

•  Classification of joint arrangements as 
joint operations or joint ventures 
IPSAS 37‘s alignment with other 
frameworks like ESA 2010 and EU 
accounting rules 

• 

benefits of improved financial reporting and alignment with 
international standards outweigh these concerns.  

•  Ultimately, IPSAS 35 is conducive to the European public good, 

supporting financial stability and economic growth within the EU. 
•  The application of the equity method, as prescribed by IPSAS 36, 
enhances the quality of financial reporting by reflecting the 
economic realities of such investments, while also supporting the 
principles of prudence and neutrality.  

•  Although some technical and practical challenges may arise, the 

• 

• 

• 

standard's conceptual merits outweigh these difficulties, ensuring that 
it is conducive to the European public good.  
IPSAS 36 serves as a robust foundation for future EPSAS standard-
setting, further guidance would ensure consistent application across 
the EU. 
IPSAS 37 provides relevant, reliable, and comparable information, 
enhancing financial transparency and aiding in economic decision-
making.  
IPSAS 37 is conducive to the European public good, additional 
guidance may be necessary to ensure consistent application across 
EU Member States.  

•  Overall, the adoption of IPSAS 37 is expected to improve the quality 
of financial reporting, thereby supporting the objectives of EPSAS. 

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IPSAS 38 Disclosure 
of interest in other 
entities 

May 2021 

•  Solid basis for developing equivalent 

EPSAS standards 

•  Addressing user concerns about off-

balance sheet entities 

IPSAS 39 Employee 
Benefits 

March 
2020 

• 

IPSAS 39’s alignment with the draft 
EPSAS framework 

•  Contribution to better financial 
management and stewardship  

IPSAS 40 Public 
sector combinations 

October 
2021 

IPSAS 41 Financial 
Instruments 

November 
2019 

•  Supporting of the qualitative 

characteristics of the draft EPSAS 
framework 

•  Provisions for the classification of 

public sector combinations 

•  Additional guidance on distinguishing 

• 

• 

between amalgamations and 
acquisitions 
IPSAS 41's alignment with the draft 
EPSAS Conceptual Framework 
Introduction of a unified classification 
and measurement model for financial 
assets 

•  Need for additional guidance on 
expected credit loss model 

IPSAS 42 Social 
Benefits 

March 
2020 

•  Limitation of recognizing liabilities 
for the next social benefit payment 

• 

• 

• 

• 

• 

• 

IPSAS 38 aligns well with the EPSAS CF and does not present any 
significant adverse effects on the European economy, including 
financial stability and growth.  
IPSAS 38 is conducive to the European public good, additional 
guidance may be necessary to ensure consistent application and to 
address comparability objectives effectively.  
IPSAS 38 offers a robust foundation for developing equivalent 
EPSAS standards, promoting improved financial reporting practices 
across the EU. 
IPSAS 39 contributes positively to the European public good, 
additional guidance on areas like discount rates could harmonize 
practices across EU.  
IPSAS 39 provides a solid basis for the future implementation of 
EPSAS, promoting enhanced financial reporting and management 
accountability. 
IPSAS 40 is conducive to the European public good, as it promotes 
transparency and aids in the assessment of management stewardship.  

•  To achieve consistent application across the EU, key areas 
highlighted for further consideration include separation of 
amalgamations and acquisitions, recognition principles for certain 
assets and liabilities, and presentation options within net 
assets/equity in amalgamations. 

• 

IPSAS 41 effectively aligns with the goals of the European public 
good by promoting financial transparency and stability, while also 
catering to the specific requirements of the public sector.  
•  Although its implementation may involve complexities, the 

• 

• 

advantages of enhanced financial reporting and improved risk 
management practices surpass the related costs.  
IPSAS 41 is considered supportive of the European public good 
objectives, advocating for its integration within the EPSAS 
framework. 
IPSAS 42 approach to recognizing liabilities primarily for the next 
social benefit payment may not fully capture the long-term 
obligations and economic substance of various social benefit 

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•  Recommendations for further 
guidance and improvements in 
specific areas of IPSAS 42 

• 

schemes, particularly those designed to transfer wealth across 
generations.  
IPSAS 42 is deemed conducive to the European public good, as it 
does not adversely affect financial stability or economic growth. To 
achieve consistent application and address comparability objectives 
within the EU, further guidance and potential improvements in 
specific areas are recommended. 

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In conclusion, 34 IPSAS standards have been screened during the meetings of the EPSAS Expert 
Group to assess the conceptual alignment of those IPSAS with the EPSAS Conceptual Framework 
as well as identifying needs for harmonisation or additional guidance and making a judgment on 
whether the cost of implementation is in a positive relation the individual standards would bring 
enhance the European public good.  

Overall,  all  the  screened  IPSAS  standards  have  been  found  to  be  in  line  with  the  EPSAS 
Conceptual Framework as well as been seen as beneficial for the European fiscal management and 
transparency system. The need for additional guidance has been highlighted for areas like using 
estimates,  the  application  of  the  fair  value  model  in  the  public  sector,  revenue  recognition 
(particularly of taxes) or the application of the concept of control in service concessions. 

4.4  Survey results on suitability of IPSAS for Member States and their 

potential use for developing EPSAS 

4.4.1. 

Introduction 

In  2013,  the  Commission  published  an  assessment  of  the  suitability  of  IPSAS  for  the  Member 
States (‘2013 IPSAS report’) based on a broad public consultation. The result of the consultation 
was that 38.2% of respondents felt that IPSAS would be suitable as accounting standard for the 
European Union, 30.9% partially agreed, while 27.9% disagreed35.  

The  main  concerns  included  limited  precision,  due  to  options  within  IPSAS  and  a  need  for 
harmonisation, particularly for small and less risky entities; concern over the completeness of the 
standards (e.g. taxation, social benefits); comprehensive disclosure requirements; the at the time 
unfinished  conceptual  framework;  insufficient  EU  public  sector  involvement  in  IPSASB’s 
governance and cost and effort needed for implementation. For further details please refer to the 
2013 IPSAS report. 

As a follow-up of the 2013 IPSAS report,  the Commission (Eurostat) commissioned in 2024 a 
survey  in  order  to  assess  whether  IPSAS  are  suitable  for  the  Member  States  and  explore  their 
potential use for developing EPSAS. 

4.4.2. 

Survey design and implementation 

The  2024  survey  was  designed  to  cover  the  major  areas  of  suitability  of  IPSAS  standards, 
suitability of IPSAS governance and suitability of IPSAS as a reference framework for developing 
EPSAS. The survey questionnaire included three questions.  

35  The  summary  of  responses  of  the  public  consultation  is  available  on  Public  consultation  -  Assessment  of  the 
suitability of the International Public Sector Accounting Standards for the Member States 

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The intention was to be able to cluster and aggregate responses where possible, while providing 
enough room for individual remarks. Therefore, a partly structured design was chosen.  

Each area was addressed by a leading question on whether there is agreement that IPSAS is suitable 
(providing  the  broad  categories  “yes”,  “partly”  and  “no”),  followed  up  by  a  question  for 
specification as well as an encouragement to provide narrative supporting text within in an open 
text box.  

To enable Member States making an informed judgment, the questionnaire was prefaced by an 
introduction providing a short summary of recent developments in the area of IPSAS as well as 
references to relevant documents.  

The questionnaire was concluded by an Annex providing a list of IPSAS Standards having their 
effective date after the last survey on suitability of IPSAS.  

A  disclaimer  concerning  the  responses  provided  in  the  2024  survey:  although  Member  States 
expressed their level of agreement by choosing a predefined category (yes/partly/no), they used 
the open comment space to highlight benefits or concerns around the questions raised or IPSAS 
more generally. These comments provided very valuable insights into their perspectives, but they 
cannot attributed automatically to all respondents in the same category.  Therefore, this analysis 
seeks to highlight prevalent trends and patterns, while at the same time giving an overall indication 
of level of agreement with the statements made.  

4.4.3. 

IPSAS Standards (Q1) 

The question on the suitability of IPSAS Standards reads: “Do you consider that IPSAS constitute 
a  suitable  reporting  framework  for  the  Member  States,  in  particular  from  a  viewpoint  of  its 
completeness  and  relevance  for  the  public  sector  (Yes/No/Partly)?  What  specific  areas  would 
require additional changes?”.  

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Figure 20. Distribution of responses to Q1 

42%

46%

12%

Yes No

Partly

Of  all  respondents  from  the  Member  States,  46%  agreed  that  IPSAS  would  be  a  suitable 
framework, while 42% partly agreed and only 12% of respondents disagreed, see Figure 20. This 
is a significant increase of agreement compared to the previous survey.  

While respondents agreed or partly agreed with the statement, they also provided valuable insights 
into their assessment and provided suggestions. 

Assessment and suggestion on suitability of IPSAS 

MS agreeing with the statement noted that IPSAS represent complete and high-quality standards 
from  an  international  background  with  a  sound  governance  process  embedded.  Therefore,  MS 
believed that IPSAS as a reference framework will enhance standardisation and comparability of 
public financial reporting in the EU.  

Member states  partly agreeing with the statement highlighted the need for EPSAS reporting to 
integrate  smoothly  into  the  European  System  of  Accounts  (ESA).  They  pointed  out  high 
implementation  costs and the necessity for  detailed guidance, differential  reporting,  and better 
alignment  with  ESA.  Additionally,  they  called  for  more  focus  on  budget  implementation  and 
spending deficits, using IPSAS as a solid foundation adaptable to national needs. 

MS disagreeing with the statement raised no conceptual issues with the standards themselves but 
reflected on the concern of potential high implementation cost and the suitability of the option of 
using fair value in  some specific  circumstance (e.g. assets held  for  operational  purposes) as a 
measurement basis in the public sector. As outlined in Chapter 4.1, the IPSASB meanwhile issued 
a guidance with IPSAS 46 Measurement addressing this concern.  

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The concerns are further discussed in section 4.4.6 Complementary context on issues raised in the 
survey. 

4.4.4. 

IPSASB Governance (Q2) 

The question on the suitability of IPSASB governance was phrased as: "Do you consider that the 
governance  around  IPSAS  makes  it  a  suitable  reporting  framework  for  the  Member  States 
(Yes/No/Partly)? What governance adjustments would be necessary?".  

Figure 21. Distribution of responses to Q2 

27%

15%

58%

Yes No

Partly

Form the respondents 27% of the MS agreed with the statement, while 58% partly agreed. 15% of 
the MS respondents disagreed with the statement, see Figure 21.  

While respondents agreed or partly agreed with the statement, they also provided valuable insights 
into their assessment and provided suggestions. 

Assessment and suggestions on the governance of IPSAS 

MS  agreeing  with  the  statement  acknowledged  that  there  is  a  strong  public  sector  expertise 
embedded in the governance system of IPSAS, and that a thorough, independent and transparent 
due process is in place. MS highlighted the international recognition and credibility of the IPSAS 
governance system but also addressed from their point of view a need for a stronger independent 
funding of IPSAS.  

MS  partly  agreeing  with  the  statement  emphasised  their  desire  for  a  stronger  institutional 
European  involvement  in  the  IPSAS  governance  system.  Some  MS  also  pointed  out  that  the 
involvement of users of financial reports could be stronger.  

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MS disagreeing with the statement shared their concern on whether from a democratic legitimacy 
point  of  view  a  private body  like  IFAC  could  be  the  standard  setter  for  the  EU.  Also,  an  even 
stronger involvement of more public members on the IPSASB was desired. 

4.4.5. 

Suitability of IPSAS as a reference framework for developing EPSAS (Q3) 

The question on the suitability of IPSAS  for developing EPSAS: "Do you consider that IPSAS 
could serve as a suitable reference framework for the development of EPSAS (European Public 
Sector  Accounting  Standards)?  What  specific  modifications  would  be  necessary  to  ensure  its 
relevance and applicability?". 

Figure 22. Distribution of responses to Q3 

19%

15%

66%

Yes No

Partly

Out of all respondents 66% of the MS agreed with the statement, while 19% partly agreed. 15% 
of the MS respondents disagreed with the statement, see Figure 22.  

While respondents agreed or partly agreed with the statement, they also provided valuable insights 
into their assessment and provided suggestions. 

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Assessment and suggestions on IPSAS as reference framework for developing EPSAS 

MS agreeing with the statement highlighted that IPSAS are already used as a reference framework 
by  many  MS,  they  pointed  out  that  particularly  the  neutrality  of  IPSAS  would  enhance 
transparency and comparability. It was also mentioned that using IPSAS as a reference framework 
would allow for a cost-efficient implementation of EPSAS. It was also brought up that a sequenced 
implementation might to be considered and that an endorsement mechanism comparable to the 
private sector financial reporting in the EU (with ARC36 and EFRAG37) would be beneficial. 

MS partly agreeing with the statement called again for a well-designed integration into the existing 
reporting landscape of the EU and raised concern that otherwise information might be published 
in  multiple  places  at  the  same  time.  From  those  MS  partly  agreeing  there  was  also  an 
acknowledgment of the strong foundation IPSAS would form for EPSAS and the equal treatment 
and chance of harmonisation it would provide. 

MS  disagreeing  with  the  statement  emphasised  how  important  political  support  would  be  and 
highlighted that a governance mechanism would have to keep a proper cost/benefit ratio in mind. 
Ultimately, MS disagreeing pointed out that legal frameworks on national level would have to be 
adapted to accommodate an EPSAS. 

4.4.6. 

Complementary context on issues raised in the survey 

The landscape of standard-setting in public sector accounting highlights the roles of international 
and regional/national standard setters, users, and auditors, see Table 7. 

Table 7. Architecture of standard-setting 
Category 

Main 
Responsibilities 

International 
Standard Setter 
Pick up global 
issues relevant 
to worldwide 
users 

Set principle-
based 
standards, 
provide basis 
for conclusions 
Connect 
international 
stakeholders 

Regional / National 
Standard Setter 
Endorse international 
standards 

Remove/implement 
options in line with 
international standards 

User 
(Governments) 
Set rules for 
interpretation of 
principle-based 
standards using 
professional 
judgment 
Provide resources 
for continuous 
education and 
training 

Auditors 

Ensure rules 
align with 
applicable 
standards 

Ensure 
consistency and 
correctness of 
application 

Provide guidance for 
regional/local reporting 
issues and connect 
regional stakeholders 

Connect with 
beneficiaries of 
reporting (also for 
funding) 

Highlight areas 
for improvement, 
provide 
assurance 

36 Accounting Regulatory Committee. 
37 European Financial Reporting Advisory Group. 

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Additional 
Notes 

IPSASB 
includes 
preparer view, 
public oversight 
from PIC and 
CAG 
No EPSAS 
needed due to 
modularity and 
flexibility 

Options may inhibit 
comparability and 
uniformity 

Perceived high 
implementation 
cost 

Perceived high 
implementation 
cost 

Consider circumstances 
and conditions in 
individual member 
states; differential 
reporting 

Detailed 
implementation 
guidance and 
practical rules 
needed 

The  IPSASB  is  central  in  identifying  global  reporting  issues,  establishing  principle-based 
standards, and engaging with international stakeholders. It incorporates preparers' perspectives and 
operates under the oversight of the Public Interest Committee (PIC) and the Consultative Advisory 
Group (CAG). Regional and national standard setters may endorse international standards, adapt 
them to local contexts, and provide guidance on regional reporting issues, though this may affect 
comparability and uniformity on a global level. These adaptations may inhibit comparability and 
uniformity, requiring consideration of circumstances and conditions unique to individual member 
states  and  potentially  leading  to  differential  reporting.  European  Public  Sector  Accounting 
Standards (EPSAS) are well positioned to bridge an important gap between IPSAS and European 
regional public sector accounting.  

Governments,  as  primary  users,  interpret  principle-based  standards,  such  as  materiality  and 
disclosures, using professional judgment. They must allocate resources for education, training, and 
implementation while maintaining connections with reporting beneficiaries. Providing resources 
for  continuous  education  and  training,  as  well  as  for  implementation,  is  crucial.  High 
implementation costs and the need for detailed guidance and practical rules can be addressed best 
on  this  level.  These  costs  are  often  perceived  as  high,  necessitating  detailed  implementation 
guidance  and  practical  rules.  Auditors  ensure  that  users'  interpretations  align  with  applicable 
standards,  maintain  consistency  and  correctness,  and  identify  areas  for  improvement  and  can 
provide important recommendations to address the cost/benefit ratio. They also highlight areas for 
improvement and ensure the information's reliability. 

Materiality in financial statements, as outlined by the IPSASB, allows for the omission of specific 
accounting  requirements  for  insignificant  matters,  while  significant  matters  must  comply  fully. 
The  determination  of  materiality  is  influenced  by  factors  such  as  the  nature,  size,  and 
circumstances of each entity, applying to items both individually and collectively. Disclosures are 
not  required  if  they  are  immaterial,  and  this  guidance  does  not  supersede  existing  IPSAS 
requirements. 

In supporting the transition to standardized accounting, tools such as "Pathways to Accrual" are 
essential.  This  tool,  developed  and  operated  by  the  International  Federation  of  Accountants 

EN 

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(IFAC), is designed to aid public sector entities transitioning from cash to accrual accounting. It 
provides  an  overview  of  the  transition  context,  explores  various  pathways  for  incremental 
implementation,  and  identifies  tasks  related  to  recognizing  assets,  liabilities,  revenues,  and 
expenses.  Practical  suggestions  are  offered  based  on  the  experiences  of  other  entities  and 
jurisdictions, noting the higher costs of transitioning from cash to accrual compared to moving 
from accrual to IPSAS.  

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Annex 4.1. List of IPSAS standards by degree of public sector guidance and 
effective date 

EN 

76 

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1Presentation of Financial StatementsDecember 2006x1x1x1January 01, 20082Cash Flow StatementsMay 2000x1x1x1July 01, 20013Accounting Policies, Changes in Accounting Estimates and ErrorsDecember 2006x1x1x1January 01, 20084The Effects of Changes in Foreign Exchange RatesDecember 2006x1x1x1January 01, 20105Borrowing CostsMay 2000x1x1x1July 01, 20016Consolidated and Separate Financial StatementsDecember 2006x1January 01, 20087Investments in AssociatesDecember 2006x1January 01, 20088Interests in Joint VenturesDecember 2006x1January 01, 20089Revenue from Exchange TransactionsJuly 2001x1x1July 01, 200210Financial Reporting in Hyperinflationary EconomiesJuly 2001x1x1x1July 01, 200211Construction ContractsJuly 2001x1x1July 01, 200212InventoriesJuly 2001x1x1x1January 01, 200813LeasesDecember 2006x1January 01, 200814Events after the Reporting DateDecember 2006x1x1x1January 01, 200815Financial InstrumentsDecember 2001x1January 01, 200316Investment PropertyDecember 2006x1x1x1January 01, 200817Property, Plant, and EquipmentDecember 2006x1January 01, 200818Segment ReportingJune 2002x1x1x1July 01, 200319Provisions, Contingent Liabilities and Contingent AssetsOctober 2002x1x1x1January 01, 200420Related Party DisclosuresOctober 2002x1x1x1January 01, 200421Impairment of Non-Cash-Generating AssetsDecember 2004x1x1x1January 01, 200622Disclosure of Financial Information about the General Government SectorDecember 2006x1x1x1January 01, 200823Revenue from Non-Exchange TransactionsDecember 2006x1x1June 30, 200824Presentation of Budget Information in Financial StatementsDecember 2006x1x1x1January 01, 200925Employee BenefitsFebruary 2008x1January 01, 201126Impairment of Cash-Generating AssetsFebruary 2008x1x1x1April 01, 200927AgricultureDecember 2009x1x1x1April 01, 201128Financial Instruments: PresentationJanuary 2010x1x1x1January 01, 201329Financial Instruments: Recognition and MeasurementJanuary 2010x1x1x1January 01, 201330Financial Instruments: DisclosuresJanuary 2010x1x1x1January 01, 201331Intangible AssetsJanuary 2010x1x1x1April 01, 201132Service Concession Arrangements: GrantorOctober 2011x1x1January 01, 201433First-time Adoption of Accrual Basis IPSASJanuary 2015x1x1January 01, 201734Separate Financial StatementsJanuary 2015x1x1January 01, 201735Consolidated Financial StatementsJanuary 2015x1x1January 01, 201736Investments in Associates and Joint VenturesJanuary 2015x1x1January 01, 201737Joint ArrangementsJanuary 2015x1x1January 01, 201738Disclosure of Interests in Other EntitiesJanuary 2015x1x1January 01, 201739Employee BenefitsJuly 2016x1x1January 01, 201840Public Sector CombinationsJanuary 2017x1x1January 01, 201941Financial InstrumentsAugust 2018x1x1January 01, 202342Social BenefitsJanuary 2019x1x1January 01, 202343LeasesJanuary 2022x1x1January 01, 202544Non-Current Assets Held for Sale and Discontinued OperationsMay 2022x1x1January 01, 202545Property, Plant, and EquipmentMay 2023x1x1January 01, 202546MeasurementMay 2023x1x1January 01, 202547RevenueMay 2023x1January 01, 202648Transfer ExpensesMay 2023x1January 01, 202649Retirement Benefit PlansNovember 2023x1January 01, 202650Exploration for and Evaluation of Mineral ResourcesNovember 2024x1January 01, 202781733314247439424844025.854.89.79.710010.361.517.910.310010.060.020.010.0100Applicable Jan. 2025ClassificationCountIPSAS StandardsEffective Jan. 2025%Effective dateEffective Jan. 2013ClassificationClassificationClassificationCountCountNumberIssue dateTotalTitle 
 
 
 
 
Legend: 

Note:  
IPSAS shaded in grey and in italic are superseded IPSAS as of January 1, 2025 or when it is superseded by a more recent IPSAS. Applicable IPSAS Standards 
means that they are not yet effective but can be early applied

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IPSAS Standards with minor public sector guidance added (public sector terminology and minor modifications)IPSAS Standards with public sector guidance added (public sector terminology and modifications)Public sector specific IPSAS Standards with some IFRS-based guidancePublic sector specific IPSAS Standards 
 
 
Annex 4.2. List of IPSAS standards issued after 2012 
IPSAS 

Effective date 

Number  Title 

33 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 

45 
46 
47 
48 
49 
50 

First-time Adoption of Accrual Basis IPSASs 
Separate Financial Statements 
Consolidated Financial Statements 
Investments in Associates and Joint Ventures 
Joint Arrangements 
Disclosure of Interests in Other Entities 
Employee Benefits 
Public Sector Combinations 
Financial Instruments 
Social Benefits 
Leases 
Non-current  Assets  Held  for  Sale  and  Discontinued 
Operations 
Property, Plant, and Equipment 
Measurement 
Revenue 
Transfer Expenses 
Retirement Benefit Plans 
Exploration for and Evaluation of Mineral Resources 

January 01, 2017 
January 01, 2017 
January 01, 2017 
January 01, 2017 
January 01, 2017 
January 01, 2017 
January 01, 2018 
January 01, 2019 
January 01, 2023 
January 01, 2023 
January 01, 2025 
January 01, 2025 

January 01, 2025 
January 01, 2025 
January 01, 2026 
January 01, 2026 
January 01, 2026 
TBD 

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