Accrual Financial Reporting In the Australian Public Sector: An Economic Perspective
AbstractAustralian governments have recently moved from cash accounting to accrual accounting. This paper discusses a number of issues pertaining to key accrual fiscal measures. Governments have adopted Australian Accounting Standard 31 as their principle accounting framework, relegating the Australian Bureau of Statistics’ alternative GFS accrual framework to a secondary role. AAS and GFS differ in key respects in the derivation of the operating result. This paper suggests that the ABS framework is superior, and should have been adopted by government. Rather than welcoming the shift to accrual accounting as a good opportunity to shift the focus of medium-term fiscal policy away a narrow preoccupation with ‘cash’ balanced budgets and debt, governments have chosen to maintain policy continuity. This has led them to define new ‘headline’ fiscal measures which are either identical, or quite close, to the cash budget balance. This Commonwealth’s new ‘fiscal balance’ headline measure is discussed.
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Bibliographic InfoPaper provided by School of Economics and Finance, Queensland University of Technology in its series School of Economics and Finance Discussion Papers and Working Papers Series with number 065.
Date of creation: 20 Sep 1999
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