Sri Lanka has been moving towards accrual accounting based on IPSAS since 2004. Beginning in 2005 the government adopted a revised format for its financial statements, which closely mirrors the four financial statements required by IPSAS 1 (Statements of Financial Performance, Financial Position, Cash Flows, and Changes in Net Assets). A Statement of Budgetary Performance is also provided in the notes to the accounts to maintain alignment between budget and outturn data. All of these statements are presented on a modified cash basis with valuation at historic cost. The Statement of Financial Position includes financial assets and liabilities other than cash, including on-lending and the capital contribution in SOEs, as well as external borrowing. The government plans to expand incrementally the coverage of the financial statements to a point where the move to full accruals is possible. Currently, the notes to the financial statements include a schedule of movable assets acquired since 2004. For land and buildings, there is a current process of valuation or revaluation which, once completed and together with the data on movable assets, should permit a switch to accruals-based disclosure of fixed assets. Requirements

 Necessary

A. How to sequence the move from cash to accrual accounting in the public sector?

B. What can be learned from countries that have successfully made the transition?