models, as well as the strengths and weaknesses of each in meeting the objectives of financial reporting. The study also recognizes the system of national accounts that was developed as a basis for economic analysis of income and expenditure flows in an economy. Further, it recognizes the difficulty of integrating this system with a country's accounting system. The study concludes that more complete and better information will meet the user needs through summary financial reports that account for total economic resources.
In addition, the Public Sector Committee of IFAC has issued exposure drafts on the recognition of assets and liabilities, as well as measuring the performance of international governmental units. Much work remains before these proposed standards will be accepted by the participating countries to assure consistency in the application of accounting standards.
New Zealand is at the leading edge of international development, with the presentation of accrual-based financial statements since 1992. The benefits it hopes to reap from these statements are as follows: show more clearly the economic impact of government activity; provide better information for Parliament and the electorate to assess the management of public resources; provide reports of revenue, expenses, and operating balance in an operating statement and reports of the Crown assets, liabilities, and net worth in a balance sheet; and establish a basis from which the Crown's financial operations and trends in its financial position can be monitored in the future.
Both Canada and Germany plan to switch to the accrual basis and to prepare consolidated financial statements. The timing for the switch has not yet been determined, however. The financial statements for Italy and Spain are similar and present revenues and expenditures classified by source and activity. Japan provides summaries of revenues and expenditures for different accounts, such as the general account, special accounts, tax collection, and debts. The Chinese financial statements are on the cash basis and emphasize centralized control, not information or accountability.
JESSE W. HUGHES
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GOVERNMENT CORPORATION . An organization owned by the government, but independently managed and financed like a private business. Most government corporations are governed by a board of directors, administered by a professional executive, and financed through the issuance of tax-exempt bonds and the marketing of a service.
Government corporations exist at every level of U.S. government, but are perhaps most prominent at the federal and state levels. Other names for such organizations include public authority, public corporation, special purpose government, public enterprise, and public benefit corporation.
Quasi-public organizations have long been a part of U.S. government. In the 1800s and early 1990s, most corporations were considered to be performing functions of a public character. Consider, for example, the Erie Canal Commission, established in 1816 to manage New York's canal system; the Panama Railroad Company, purchased by