The revised version of the cash basis international public sector accounting standard (IPSAS) would also address the main obstacles resulting from its current requirements.

These included the requirement to prepare consolidated financial statements and disclosure of information about external assistance and third party payments.

IPSASB said although the standard has an important role in the board’s standard-setting strategy, it was not widely adopted.

Ian Carruthers, IPSASB chair, said: “Robust financial reporting on a cash basis can be an important foundation for broader improvements in public sector financial management.

“However, the revisions make clear that the IPSASB views the Cash Basis IPSAS as an important stepping stone on the journey to full accrual accounting rather than an end in itself.”

It said that it had identified the need for the cash basis accounting standards to be included in the “suite of IPSAS to enhance financial reporting by governments in developing economies, and as a basis for the transition to the accrual basis of financial reporting and adoption of accrual IPSAS.”

The revised version also includes clarification to the role of the cash basis standards as a path to adoption of accruals, “rather than an end in itself”.

The accounting standard, Financial Reporting under the Cash Basis of Accounting, will be effective 1 January 2019, but earlier adoption is encouraged.  

IPSASB also released an international accounting standard on social benefits for consultation last week – but with an alternative model published alongside it for the first time as the board could not agree on one way of accounting for social benefits.