International Journal of Governmental Financial Management21
standards (IPSAS – International Public Sector Accounting Standard). A conclusion ends thearticle.
Revenues and Expenditures
The main accounting concepts are revenues and expenditures (Mülhaupt, 1987).
represent claims on cash receipt, while
represent obligations for cash payments.This means that the revenues and expenditures always will have a
either in theaccounting period in question (in the form of present (or actual) cash receipts and present (oractual) cash payments, respectively) or in later accounting periods (in the form of future cashreceipts and future cash payments, respectively). The revenues and expenditures could alsohave another effect (in addition to the money effect), namely a
in the formof revenues earned and expenses incurred. As distinct from the money effect of the revenuesand expenditures, which influences the cash deposit of an organization, the profitability effectof the revenues and expenditures influences the equity of the organization (i.e., the differencebetween the assets and liabilities of the organization).This means that the revenues and expenditures can be accrued according to two differentprinciples, namely a
money accrual principle
profitability accrual principle
. Theformer principle could be referred to as the
principle of current dues
(Oettle, 1990; Englishtranslation of the German term
) and it is used for reporting the moneyeffect of the revenues and expenditures. The latter principle – often imprecisely referred to asthe
– is used for reporting the profitability effect of the revenues andexpenditures.
Four Tasks of Traditional Public Sector Accounting
Public sector organizations are juridically accountable for their spending of public money:“All public sector organizations are accountable for the financial resources, whichthey have been allocated for management. In addition to the obligation forpreparing a budget, there are detailed rules regulating the cash accounts, thebookkeeping and the book closing. The specific characteristics of administrativecameralistics are reflected in these regulations.” (Wysocki, 1965, p. 17; translatedfrom German)It appears from this excerpt that ACAM has been developed for use by public sectororganizations, making it possible for them to fulfil the accountability for their spending of public money. This means that the accounts must report the expenditures of the public sectororganization, and how they have been financed in the form of revenues. Moreover, it alsomeans that the revenues and expenditures (as reported in the accounts) are to be comparedwith the corresponding budgetary revenues and expenditures:“The first task of the accounts of a public sector budget-financed administration isto report numerically correspondence or deviations between plan and executionfor this administration: ´The accounting books must be shaped in such a way thatit is possible to see how the budget execution is compared with the budget.´ ..Administrative cameralistics shall provide the figures for this comparison,referred to as ´budgetary accounting´.” (Wysocki, 1965, p. 18-19; translated fromGerman)