While many countries are still struggling to adopt accrual accounting standards, Colombia has had considerable success with this reform. The main motivation to adopt the international accrual accounting standards was the desire to meet the information needs arising from economic globalization. The Colombian public sector accounting standards (PSAS) are now broadly in line with the International accrual-basis Public Sector Accounting Standards (IPSAS - International Public Sector Accounting Standards). It is the most advanced practice in Latin America. In the case of Colombia, this process did not involve a traumatic change throughout the public sector because the PSAS was already significantly aligned with accrual-based standards particularly in the state-owned enterprise sector. The changes consisted mainly of conceptual redefinitions, accuracy, capacity building, dissemination, and development of detailed written instructions.
The greatest challenge for the Colombian National Accounting Office (Contaduría General de la Nación or CGN[1]) was implementing the accounting standards. In 1995, the first General Chart of Accounts for the Public Sector (GCoAPS) entered into force. It was developed with the participation of a large number of accountants of different government entities in order to encompass all of the operations of the public sector. One of the most difficult tasks was to determine the value of assets and liabilities, especially for some local authorities that did not have all the supporting documentation. Initially this situation impacted the quality of the information and consequently the reliability of the consolidated financial statements.
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