Accrual by 2030? Why Governments (Including SA) Are Struggling to Keep Up
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A new International Public Sector Financial Accountability Index (2025) by IFAC, CIPFA, and IPSASB shows governments are still shifting from cash to accrual accounting, but at a slower pace than expected.
The report’s objective is clear: to track how governments worldwide report their finances, compare progress over time, and project where things are headed by 2030. The Index covers 169 jurisdictions, making it the most comprehensive global snapshot of public sector financial reporting.
What the 2025 Report Found
In 2024, 31% of governments reported on accrual accounting (up from 29% in 2020).
By 2030, about 56% are projected to adopt accrual, lower than earlier forecasts.
The pandemic and financial pressures slowed reform, but the trend is still upward.
High-income countries currently dominate accrual adoption (57%), but by 2030 most accrual adopters will be middle- and low-income countries (60%).
By 2030, 81% of accrual-reporting governments will be using IPSAS standards, either directly, with modifications, or as a reference point.
Benefits of Accrual Accounting
According to IFAC, accrual accounting is more than a reporting method—it’s a tool for better governance. They argue it delivers three big benefits:
Transparency: Governments must record the true economic impact of decisions, not just cash flows.
Informed decision-making: Leaders can plan budgets, assess sustainability, and measure the full cost of programs.
Accountability: By showing assets, liabilities, and long-term costs, governments are forced to answer for today’s decisions that affect tomorrow’s taxpayers.
The Big Question
❓Will accrual accounting help government deliver the much needed services? And it’s not just about money. One of the biggest challenges for countries like South Africa is how to put a rand value on unique assets, such as wildlife, heritage, and natural resources. Without reliable valuations, accrual risks creating numbers that look neat on paper but don’t reflect reality.
So, while accrual accounting may promise transparency, accountability, and smarter decisions, but is this really true? What is certain is high costs, but does the benefit really outweigh the cost for countries like South Africa?