ROAD TOWN, British Virgin Islands: This British Caribbean dependency is adopting an accounting policy preferred by the private sector to better reflect its wealth and obligations, the territory's top financial official said Sunday.

Financial Secretary Neil Smith said the switch from cash accounting to accrual accounting — a system that determines revenues and expenses when a debt is incurred rather than after a payment is made — will take two years to fully adopt.

"The government is the largest business in the territory and it needs high quality financial information with which to manage itself," Smith said in a statement. "Cash accounting is simply too poor a system to deliver that quality of information."

The world's governments are increasingly adopting accrual accounting, which international accounting experts recommend to best ensure reliability, he added.

Located just west of the U.S. Virgin Islands, this sun-soaked chain is a thriving offshore financial center and enjoys one of the world's highest per-capita gross domestic products.