ACCRUALS IN OECD MEMBER COUNTRIES Jón R. Blöndal Directorate for Public Governance Santiago de...

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ACCRUALS IN OECD MEMBER COUNTRIES Jón R. Blöndal Directorate for Public Governance Santiago de Chile 29January 2003

Transcript of ACCRUALS IN OECD MEMBER COUNTRIES Jón R. Blöndal Directorate for Public Governance Santiago de...

Page 1: ACCRUALS IN OECD MEMBER COUNTRIES Jón R. Blöndal Directorate for Public Governance Santiago de Chile 29January 2003.

ACCRUALS IN

OECD MEMBER COUNTRIES

Jón R. Blöndal

Directorate for Public Governance

Santiago de Chile

29January 2003

Page 2: ACCRUALS IN OECD MEMBER COUNTRIES Jón R. Blöndal Directorate for Public Governance Santiago de Chile 29January 2003.

AGENDA

• Why Accruals?• Application of Accruals

– Overview of Member Countries’ Practices

• Key Issues– Recognition Issues– Valuation Issues – Accounting Standards– Implementing Accruals

• Conclusion: Importance of Cash

Page 3: ACCRUALS IN OECD MEMBER COUNTRIES Jón R. Blöndal Directorate for Public Governance Santiago de Chile 29January 2003.

WHY ACCRUALS ?

• Major Trend in OECD Member countries• Making the True Cost of Government Services Transparent• Linkages with Wider Public Sector Reforms

Page 4: ACCRUALS IN OECD MEMBER COUNTRIES Jón R. Blöndal Directorate for Public Governance Santiago de Chile 29January 2003.

SPECTRUM OF ACCRUALS (1)

• Cash Basis, But Supplementary Information Presented on Accrual Basis

• Cash Basis, Except Certain Transactions on Accrual Basis

• Accrual Basis, Except No Capitalisation or Depreciation of Assets

• Full Accrual Basis

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SPECTRUM OF ACCRUALS (2)

• Departmental/Agency Financial Statements

• Consolidated, Whole of Government Financial Statements

• Budget

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Recognition Issues

• Heritage Assets ?• Military Systems ?• Infrastructure Assets ?• Natural Resource Assets ?• Social Insurance Programs ?

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Valuation Issues

• Historical Cost• Current Market Value

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Accounting Standards

Three Basic Models for Deciding Them

• Traditional: Finance Ministry Decision, with or without Consultative Group • Australia/New Zealand: Single Standard Setter for Private and Public Sectors• International Public Sector Accounting Standards

Page 9: ACCRUALS IN OECD MEMBER COUNTRIES Jón R. Blöndal Directorate for Public Governance Santiago de Chile 29January 2003.

Implementation Issues

• Too Slow vs. Too Fast• Education and Training Issues

– Including Members of Parliament, the Media and the Public

• Computer Systems• Assets Registers• Determining Accounting Standards

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Conclusion:Cash Still Very Important

• Role of Cash-Flow Statement• Focus on Economic Impact

– Cash Injection/Withdrawal

• Fiscal Policy Setting• In-Year Control

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www.oecd.org/gov/budget

OECD Journal on Budgeting