Academic journal article Journal of Accountancy

New ED on Government Reporting

Academic journal article Journal of Accountancy

New ED on Government Reporting

Article excerpt

In an attempt to fill a void in international standards for public-sector entities, IFAC's public sector committee (PSC) issued for exposure Guideline for Governmental Financial Reporting. The draft describes the most common forms of government accounting and gives best practices examples of each.

The PSC guideline is not an accounting standard. Rather, it is intended to provide governments worldwide with a platform for a common understanding of the key principles of government accounting methods. According to the ED, which does not prescribe any one method, the four most common bases of accounting used by governments are cash, modified cash, accrual and modified accrual. The guideline endorses their use as a means to ensure more reliable, comparable information about the financial performance and position of governments.

"Governments are competing with private-sector entities for capital," said John Gruner, IFAC director general. "By making their financial positions more transparent, governments will be better able to get the capital they need."

Comments on the ED are due by July 31, 1998. …

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