Ian Ball, chairman of the Chartered Institute of Public Finance and Accounting (CIPFA) and financial transparency champion, answers the questions of The Accountant on Greece’s misleading debt measurement and why Germany turns its back on IPSAS

On former Greek Deputy Finance Minister June announcement that Greece would be implementing IPSAS and the capacity to do so:

"Like any government moving to adopt IPSAS or accrual accounting, the capacity has to be built or hired. Governments currently using cash accounting will never have the capacity to operate a full accrual based system – it would be wasteful for them to do so. So, if they wish to move to accrual accounting, they will need to develop the capacity."

On Germany, one of Greece’s toughest creditors, who doesn’t use IPSAS:

"Germany’s reluctance to adopt IPSAS pre-dates the Greek crisis, but signals an unwillingness to produce financial information that is fully transparent and internationally comparable. If Germany used IPSAS, it would need to report a loss associated with its holdings of Greek Government debt. Under a cash basis of accounting, this is not the case."

On the difference between Greece’s debt measured under IPSAS (68% of GDP) and the conventional figures (180% of GDP):

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

"The difference between the IPSAS based number and the "conventional figures" is that the latter is the face value of the debt, whereas IPSAS takes account of the length of the maturity of the debt and concessional interest rates.

"Economists also agree, and it is increasingly being recognised by informed commentators, that debt with long maturities and concessional interest rates should not be measured at its face value."

Read the full Q&A with Ian Ball here