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A shift to accrual accounting means 2/3rds of governments globally will make the change
CIPFA and the International Federation of Accountants have predicted that by 2023 almost two thirds of governments around the world will be reporting on an accrual basis. Currently just one quarter of governments so far have made the transition from cash.
At the forefront of this transition are Africa, Asia, Latin America and the Caribbean and within five years the number of countries using accruals is set to rise from 13 to 61. Due to the uncertainty around the European Public Sector Accounting Standards, predictions are more complicated but the number of European governments using accruals will most likely double to 24 over the next five years.
Narrow Scope changes proposed by FASB
The FASB has proposed narrow-scope financial instruments accounting changes. The proposal clarifies 23 issues in FASB’s standards for accounting for credit losses, hedging and recognition and measurement. Public comment has been invited and can be made up until December 19.
Councils granted override on IFRS 9 for 5 years
A statutory override on accounting changes means that councils still need to record the value of their assets but are not required to charge it to their revenue account. IFRS 9 requires councils to charge assets to its revenue account based on current value year on year.
90% of respondents who responded to the consultation document said they thought the override period should not be time limited and CIPFA had also wanted an unlimited time period, but if it could not be achieved, a five-year period was the preferred option.
42% of blended finance flows into sub-Saharan Africa
Blended finance has now reached highs of $138bn globally according to the African Development Bank. Blending is the combining of concessional public finances, which could include aid, with commercial finance which funds development-related activities.
The bank stated that blended finance would be important to raising capital as attracting private investment is still hard for the African Continent.
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