Nick Mann | 20 February 2012
The European Commission has begun assessing whether International Public Sector Accounting Standards are suitable for adoption by all European Union member states.
Eurostat, the commission’s statistical agency, launched a consultation on Friday to identify the advantages and disadvantages of applying the standards EU-wide to improve fiscal surveillance.
Under a commitment made as part of the ‘six pack’ of measures agreed by EU member states last year to improve fiscal management, the commission has until the end of this year to report on whether Ipsas could work in the EU.
Eurostat said: ‘The need to assess a new approach to government accounting arises because high-quality government finance statistics data is needed to ensure a proper functioning of EU fiscal surveillance, particularly given recent economic developments.
‘The implementation of uniform and comparable accruals-based accounting practices for all the sectors of general government – that is central government, state government, local government and social security, can help ensure high-quality statistics.’
In the consultation document, Eurostat said it expected implementing Ipsas in EU member states would have ‘substantial advantages’ for the comparability, transparency and reliability of accounting. It could also improve the proper functioning of the EU’s budgetary surveillance framework and improve governance by presenting data in a ‘clear, concise, consistent and comparable’ format, it added.
But it also noted that implementing harmonised accrual-based accounting standards in EU member states would be a ‘challenging and potentially high-cost project that would need several years’.
Depending on countries’ current accounting standards, the change could involve reforming some or all public accounting systems, across many or all government bodies. In particular, this could involve ‘major changes’ for underlying IT systems and staff training, it added.
The consultation is open until May 11 2012 and a summary of results is then expected to be published in the second half of the year.
