Sharp Daily
No Result
View All Result
Thursday, May 15, 2025
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home News

National Treasury commences transition to accrual accounting in public sector

Brian Murimi by Brian Murimi
October 4, 2024
in News
Reading Time: 2 mins read

Kenya has initiated a significant reform of its public financial management system, transitioning from cash-basis to accrual-basis accounting over the next three years. The move, announced by the National Treasury on Thursday, aims to enhance transparency and accountability in government financial reporting.

The shift to International Public Sector Accounting Standards (IPSAS) accrual basis will affect national and county governments, as well as their respective entities. It follows cabinet approval in March and subsequent gazetting in August 2024.

Dr. Chris Kiptoo, Principal Secretary of the National Treasury, said: “This reform is essential to improving financial management and enhancing the accuracy of public sector financial reports. It will allow the government to present a fuller picture of its financial position.”

The transition represents a significant departure from the current cash-based system, where transactions are recorded only when money changes hands. Accrual accounting recognizes revenues and expenses when they are earned or incurred, regardless of cash flow timing.

RELATEDPOSTS

Treasury admits KES 73 billion budget error, seeks parliament’s approval for correction

March 7, 2025

Treasury proposes taking over CBK’s role in managing government securities

January 23, 2025

This change is expected to provide a more comprehensive view of the government’s financial health by requiring the recognition of assets, liabilities, revenues, and expenditures. It comes as Kenya seeks to align its financial reporting with global standards and improve decision-making processes.

The move builds on a decade of reforms following the 2010 Constitution, which introduced the Public Financial Management Act of 2012 and established the Public Sector Accounting Standards Board in 2014.

“Over this period, Ministries, Departments, Agencies, and County Governments have advanced their financial accounting capabilities, making them well-positioned for this transition,” Dr. Kiptoo stated.

A steering committee, appointed by the Cabinet Secretary for the National Treasury and Economic Planning, will oversee the implementation process. The effective date for the accrual basis is set for 1st July 2024, with the first accrual-based financial statements expected for the financial year ending 30th June 2025.

The National Treasury plans to support the transition by providing guidance on asset and liability valuation, enhancing the Integrated Financial Management Information System (IFMIS), and building capacity among public sector personnel.

However, the reform is not without challenges. It will require a detailed review of existing financial processes, revision of the Standard Chart of Accounts, and reengineering of the IFMIS system. Public entities will also need to develop and adopt accrual-based financial statement templates.

Dr. Kiptoo acknowledged these hurdles but expressed confidence in overcoming them: “With the support of the steering committee and key stakeholders, these challenges will be navigated successfully.”

Previous Post

Mogo Auto fined KES 10.85 million by CAK for misleading loans

Next Post

Nature, nurture, and human potential: Why we are not the same

Brian Murimi

Brian Murimi

Brian Murimi is a journalist with major interests in covering tech, corporates, startups and business news. When he's not writing, you can find him gaming, watching football or sipping a nice cup of tea. Send tips via bireri@thesharpdaily.com

Related Posts

Agriculture And Economy
News

Lets get Kenya out of FATF list

May 9, 2025
News

The downside of Impact Investing

May 2, 2025
News

Leadership challenges at the University of Nairobi

April 24, 2025
News

Easter eggs and earnings: Growing your nest egg with CMMF

April 16, 2025
News

Geoffrey Ruku declares KES 377M net worth during CS vetting

April 15, 2025
News

Butere girls teacher accused of altering play script with political content

April 14, 2025

LATEST STORIES

Retirement planning for non-salaried workers with CPRBS

May 14, 2025

How AGOA and EPZs can transform Kenya’s trade

May 14, 2025

Safaricom forecasts earnings boost as Ethiopian losses shrink

May 14, 2025

Why Kenya must rebuild it’s textile legacy

May 14, 2025

Structuring private equity deals in Kenya

May 13, 2025

Money market funds: Smart saving and investing in Kenya

May 13, 2025

Kenya in May: Safari, coastline & deals you shouldn’t miss

May 13, 2025

Public Health Spending expected to grow in line with ethical development goals

May 13, 2025
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024