• Register
Return to: Home > News > Standards > Argentina’s default sparks fresh call for accrual accounting

Argentina’s default sparks fresh call for accrual accounting

By Steffen Müller

In light of Argentina's recent default of its debt the International Federation of Accountants (IFAC) has reiterated the importance of accrual based accounting in the public sector and has urged the G20 to focus on initiatives to improve governments' management and financial reporting practices.

"Countries continue to default on their debt, yet aren't pushed by governments, credit rating agencies, or financial commentators to significantly improve public sector financial reporting," IFAC chief executive officer Fayezul Choudhury said.

"It is critical that the G20 focuses on initiatives to improve governments' financial management and reporting practices," Choudhury continued. "This means making accrual-based financial reporting in accordance with high-quality, globally accepted standards a key objective."

According to IFAC, adoption of the International Public Sector Accounting Standards (IPSASs) would help to avoid governments' defaults. Choudhury therefore renewed IFAC's call on the G20 to play a key role in enhancing governments' financial management by promoting IPSAS based reporting frameworks, made earlier this year in May.

"IFAC urges the G20 to promote greater adoption of IPSAS, by adding these standards to the Financial Stability Board's list of standards that are designated as deserving of priority implementation," he said.

However the international community is not the only actor who has a role to play, according to IFAC. The international federation criticised governments that have not yet transitioned from cash to accrual accounting systems.

Earlier this year The Accountant revealed that only two thirds of the world's governments have moved from cash to accrual accounting while some economic superpowers such as Germany and the US Federal government have shown no intention to change.

"These countries require private sector companies in their jurisdictions to publish audited, accrual-based, financial statements when raising funds in capital markets," Choudhury said. "What justifies the double standard whereby a government compels private companies to be transparent and accountable, when it avoids using accrual accounting itself -- despite having bonds traded on the capital markets?"

Related articles

G20 needs to maintain focus on government accounting: IFAC

Countries bring themselves to account

New wine in old bottles: the strange case of Germany's public sector accounting

Top Content

    2018 Digital Accountancy forum and awards: Digital transformation

    The Accountant presents highlights from The Digital Accountancy Forum & Awards 2018 panel discussions

    read more

    2018 Digital Accountancy Forum and Awards: Tech deep dive

    The second panel session of the day saw experts discuss how new technologies should not just be seen as a threat, and could be used to improve accounting.

    read more

    Digital Accountancy Forum and Awards: The power of data

    The third panel discussion of the day saw panellists discuss some of the worries their clients have had, how to overcome them, and how data and technology are providing real business opportunities.

    read more

    Digital Accountancy Forum and Awards: The next generation

    With young people more mobile, and technology changing the industry rapidly, the final panel session of the Digital Accountancy Forum looked at how firms would need to adapt to the new reality

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.