Implementation of the international public sector accounting standards in Europe. Variations on a global theme

Figures & data

Figure 1. Analytical framework for analysing reasons for diverging responses.

Table 1. Number and affiliation of contact persons in the reviewed countries (source: the authors).

	Government	International organizations	Academia	Accountancy firms	Total
Austria	2	1	1		4
Estonia	2		1		3
France	1		1		2
Iceland	5	1			6
Poland	2				2
Spain			1		1
Sweden	2		1		3
Switzerland	1		1		2
UK	2		2	1	5
Total	17	2	8	1	28

Table 2. IPSAS Implementation, deviations and expressed reasons (source: based on PwC, 2014 and 2019, amongst others).

	Austria	Estonia	France	Iceland	Poland	Spain	Sweden	Switzerland	United Kingdom
Administrative tradition	Continental European tradition	Scandinavian tradition	Continental European tradition	Scandinavian tradition	Central Eastern European tradition	Southern European tradition	Scandinavian tradition	Continental European tradition	Anglo-Saxon tradition
Accounting tradition and period of IPSAS implementation	Traditionally strong cash accounting tradition Decision for accrual accounting and IPSAS in 2009 (live by 2013)	Complete restructuring of Soviet financial management system, strong influence of private sector accounting changes Decision for accrual accounting and IPSAS in 2003	Strong cash accounting tradition Implementation of decision for accrual accounting in 2004; IPSAS as one of the inspirations for changes to French regulations	Early accrual accounting implementer (1997) Strong pressure by international organizations (IMF) after fiscal crisis of 2007/08 to implement IPSAS Implementation decision in 2015	Early move towards accruals (in 1994) Introduction of public sector accounting standards in 2010 with some inspiration from IFRS	Early move to accrual accounting in 1983 Implementation of IPSAS-based standards at central government level in 2011	Move towards accruals in early 1990s IFRS as one of the inspirations for more recent changes	Accrual accounting since 1977 at cantonal and municipal levels IPSAS-based “New Accounting Model” at federal level in 2009	Openness towards accruals in public sector Introduction of accrual accounting from 1994 IFRS implementation (instead of IPSAS) in 2008
Degree of national standards’ conformity with IPSAS	Medium-high degree (recent standards are not adopted)	High degree Same rules for private and public sectors	Although IPSAS are not officially considered highly relevant, most French standards are quite similar to IPSAS	Almost full implementation, but only for the “whole-of-government” reporting Single government entities follow standards of the Financial Reporting Act (FRA)	Only partial orientation to IPSAS when national standards for private and public sectors were introduced	High degree	Although IPSAS are not officially considered highly relevant, Swedish standards conform to a large extent with IPSAS	High degree	Reporting is based on IFRS; therefore, high level of compliance with IPSAS
Method of implementation	At first, change of constitution Later, translation of so-far existing IPSAS into Federal Budget Law and regulations	Development of common Estonian guidelines based on IFRS and IPSAS	Via separate standard setting board Government established its own public sector standards, e.g. for central government	After passing the Public Finance Act in 2015, stepwise implementation of IPSAS First opening balance sheet in 2017; three-year transition period, according to IPSAS 33	Introduction of general rules in 1994 with Accounting Act Establishment of (non-binding) Polish Public Sector GAAP by Ministry of Finance in 2010	Translation into a legal act by adapting IPSAS to national requirements	Central government accounting rules are to a great extent based on private sector accounting rules Standards promulgated by government ordinances	Translation of IPSAS into Federal Reporting and Budget Law and roll-out in whole federal government	After a long process of development and testing, IFRS-based standards were codified by the Treasury (Financial Reporting Manual)
Existence of a public sector standard setting committee and its competences	No standard setting board established and no formal mechanism in place to adopt new IPSAS	Estonian Accounting Standards Board (EASB) for accounting standards in public as well as private sectors	Independent standard setting board for public sector (CNOCP), with full regulatory powers	Government Accounting Standards Board	Ministry of Finance issues Public Sector GAAP Common standard setter for public and private sector	Two neighbouring departments in the Ministry of Economics and Finance are responsible for setting standards in the private sector and for central and local government	National Financial Management Authority (ESV) sets standards for central government and oversees financial reporting	No specific standard setting board; MoF is responsible for standards	Financial Reporting Advisory Board (FRAB) monitors reporting practice and development of IFRS and IPSAS
Important deviations from IPSAS	Most of IPSAS 1–32 implemented; these IPSAS were available at the point of reform decision A few IPSAS only partly implemented	IPSAS 10 and 18 are not implemented	More emphasis on historical costs for valuation Pension provision only disclosed in notes Diverging structure of income statement	No deviations planned so far; accounts in full compliance with IPSAS Some delays due to outbreak of COVID-19 pandemic	Less detailed presentation of financial statements No consolidation Abstention from disclosing certain financial items	Only IPSAS issued before 2010 (IPSAS 1-29) are covered; only minor deviations (later issued IPSAS were not considered)	IPSAS 10, 22, 26, 27 and Cash-basis IPSAS are considered not applicable; deviations from IPSAS 1, 6 (now 35), 16, 17 and 18	Minor deviations in Cash Flow Statement and with regard to valuation of certain military assets; no segment reporting	As IFRS-based standards have been adjusted to requirements of public sector, there are various deviations from IFRS and thus also from IPSAS, but most are not substantial
Expressed reasons for deviations	Some standards not deemed applicable Intention to be “compatible” with government statistics rules, foremost the European System of National Accounts (ESA) Standards from IPSAS 33 onwards not considered yet, in order to avoid “reform overload”	Preference for shorter, simpler and more practical national standards	Less choice for asset valuation IPSAS considered insufficient with regard to public sector specifics	Given the relatively small budget and assets of central government agencies, concerns were raised as to whether consolidation (IPSAS 6) would really be necessary	The Accounting Act and the KSR-standards focus on both private and public sectors and were strongly influenced by IAS/IFRS MoF chose a more pragmatic and simplified way of changing public sector accounting	Well established tradition in Spanish public sector accounting to follow the private sector developments, e.g. towards IFRS Harmonization of accounting in both sectors is a dominant motive	IPSAS are considered costly, time-consuming and partly inappropriate for public sector particularities	Partly caused by Swiss Debt Brake; additionally: simplification of bookkeeping practice	Minor deviations from IPSAS are justified as acceptable and even unavoidable, because IFRS adjustments were made without explicit recognition of IPSAS details
Summary: Particularities of IPSAS implementation	Only IPSAS available in 2009 (1–32) implemented Non-relevant IPSAS not implemented	Deliberate break with previous Soviet accounting tradition non-relevant IPSAS not implemented	Although independence from IPSAS is demonstrated, most standards are de facto quite similar to IPSAS	Non-relevant IPSAS not implemented	Pragmatic way of selecting only suitable IPSAS Common standard setter KSR for public and private sectors	Early adopter Only IPSAS available at the time of implementation decision (2010) considered	Early adopter Moderate accordance with IPSAS because of perceived inappropriateness of several IPSAS	Relatively high degree of implementation Minor deviations with regard to presentation of issues	Adoption of IFRS instead of IPSAS Most standards are de facto quite similar to IPSAS

PwC. (2014). Collection of information related to the potential impact, including costs, of implementing accrual accounting in the public sector and technical analysis of the suitability of individual IPSAS standards. PricewaterhouseCoopers.

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PwC. (2019). Accounting maturity update. 2019 preliminary results. PricewaterhouseCoopers.

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