Cash versus accrual accounting for the public sector—EPSAS

ABSTRACT

An initiative aimed at developing a suite of financial reporting standards for use in the public sector in Europe (EPSASs) has led to an interesting discussion on the pros and cons of moving fully from cash to accrual accounting in the German public sector. This article examines the key arguments. The discussion so far boils down to whether there is a sufficient cost–benefit case to support such a move. The authors conclude that further factors must be considered in reaching a decision; either way Germany needs to be heard as a constructive participant in the debate.

KEYWORDS:

• Accrual accounting
• cash accounting
• EPSAS
• GFS
• IDW
• IPSAS