Other countries experience in accrual

accounting
• Australia

The 1999-2000 budgets, Australia published comprehensive

accrual-based financial statements and had wholly adopted
accrual output budgeting (C. Mark, 2006)

Australia has produced a budget surplus steadily close to a

decade, and it has thrived in reducing its net debt from a
high of 25% of GDP in the mid-1990s

Its gross financial liabilities have reduced from a soaring of

43% of GDP in 1995 to 15% in 2005, the second lowest
possible percentage in the OECD2 (OECD Economic Outlook,
2005).
 The rationale for accrual accounting
• Accrual accounting offers the benefits of
improved accountability and improved resource
management (Funnell & Cooper 1998: 3; Ranby
1997: 9).

Enhance accountability since the true cost of

government spending is conveyed in a more
transparent manner.

Cash system is unable to provide adequate

information for the full costing of operation
(Management Advisory Board (1997)
 New Zealand
• Issues : output-based budgeting

The legislature specifically avoids specifying how much is

to be spent on the individual expense-generating elements
of each output.

President complicates the budget process in ways that a

Parliamentary system avoids, making the possibility of an
American output-based budgeting system seem even more
uncertain.

GAO in its 2000 report to Congress on accrual accounting,

in which it essentially recommended against implementing
a full accrual system