An important step forward

The news that accrual accounting is, at long last, now on its way towards being implemented as the methodology for recording the government’s revenue and expenditure joins the several recent historical developments in the history of our country’s financial administration.

Accrual accounting – assuming that all within the public service take a genuine interest in learning as much as possible its implications and implementation – is certain to, at least in the first few years of its coming into force, bring up some surprises, not least statistical, and I sincerely hope that our political structures will not use these inevitable discoveries to score political points over each other. It will be all so childish if politicians so indulge with what, after all, is essentially only (even if fundamental) a newly available technical tool.

Perhaps the main essence of accrual accounting will in fact be the possibility that at a given point in time everyone will – when financial statistics are published regularly and punctually – be able to see and assess the real situation of our public finances. Consider a simple example.

Today (without accrual  accounting), if, say on the eve of a general...