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Reform Support

Supporting reforms to ensure efficient and effective revenue administration and public financial management.

Exploring options and preparing an action plan for the implementation of a new budgetary accounting and financial reporting framework in Luxembourg

The European Commission is supporting the State Treasury, the Ministry of Finance and the Finance Inspectorate to assess the feasibility of a transition to an accrual-based budgetary accounting and financial reporting framework for Luxembourg’s central government.

Context

The European Commission is working together with EU Member States to increase the transparency and comparability of public sector financial accounting and reporting between and within Member States by developing and implementing a harmonised European accounting framework. While Eurostat’s work is under progress on the development of European Public Sector Accounting Standards (EPSAS), Member States are encouraged to increase fiscal transparency by implementing an accrual-based accounting framework, such as International Public Sector Accounting Standards (IPSAS).

Support delivered

The Commission is providing technical support over a two-year period. The support measures consist of:

  • Reviewing the current budgetary accounting and financial reporting system in Luxembourg’s central government;
  • Analysing the opportunities and challenges associated with implementing accrual accounting in Luxembourg, and proposing options for change with recommendations;
  • Evaluating the gaps between the selected option and Luxembourg’s current budgetary accounting and financial reporting system;
  • Delivering an action plan for the implementation of accrual accounting in Luxembourg’s central government.

Expected results

The beneficiary authorities have strengthened their understanding of the current financial accounting and reporting system in place in Luxembourg, identified the gaps with IPSAS and EPSAS, and obtained clarity on the practical steps to be taken for the transition to an accrual-based accounting system at central government level.

It is expected that the national authorities formally endorse the action plan for the implementation of an accrual-based accounting framework in Luxembourg’s central government.