GOVERNMENT ACCOUNTING

CONCEPTUAL FRAMEWORK
 OBJECTIVE

Auditors in providing
Government Compilers of financial an opinion as to
Users of financial reports in
interpreting the information
accounting reports in addressing whether the financial presented in the financial
accounting issues reports have reports that have
standard setters which have yet to beenprepared in been prepared in
in performing regulated in the accordance with the accordance with
the government accounting
their duties standards governmental Standard
accounting standards
 1) Conceptual Framework is not an
accounting standard

2) The conceptual framework serves as

a reference if there are accounting
problems that have not been stated in
SAP
POSITION OF THE
CONCEPTUAL FRAMEWORK 3) If there is a conflict between the
conceptual framework and
accounting standards, then the
accounting standard provisions are
favored relative to the conceptual
framework
GOVERNMENT ACCOUNTING ENVIRONMENT

→ The operating environment of government organizations affects the characteristics of

the purpose of accounting and financial reporting. The important traits of the government
environment that need to be considered in determining the purpose of accounting and
financial reporting are as follows:

(a) A key feature is the structure of government and the services provided:
(1) the general form of government and the separation of powers;
(2) the system of government autonomy and revenue transfers between governments;
(3) the influence of the political process;
(4) the relationship between tax payments with government services.

(b) The characteristics of government finances that are important for control:
(1) the budget as a statement of public policy, fiscal targets, and as a means of control;
(2) investing in assets that do not directly generate revenue;
(3) the possible use of fund accounting for control purposes; and
(4) the depreciation of the value of assets as economic resources because of use in the
operations of government
USER FINANCIAL STATEMENTS

Public

Legislative, Parties who give or

play a role in the donation,
investment and loan process
FINANCIAL
STATEMENT
Parties who give or play a role in
the donation, investment and loan
process

Government
 ACCOUNTING & REPORTING ENTITIES

 An accounting entity is a unit of the government that manages a budget, assets and liabilities
and conduct accounting and present financial reports based on the on the accounting
conducted

 A reporting entity is a government unit consisting of one or more accounting entities and in
accordance with the provisions of laws and regulations are required to present accountability
reports, such as general purpose financial reports, which consists of:
(a) The Central Government;
(b) The local government;
(c) Each state ministry or agency within the central government;
(d) Organizational units within the Central/local government or other organizations,
which according to laws and regulations are required to present financial reports.
 THE ROLE OF GOVERNMENT FINANCIAL REPORTING

• Accountablity for resource management and policy

Accountability implementation is entrusted to the reporting entity in
achieving the goals set periodically.
• Assist users evaluate the implementation of activities of a reporting entity
in the reporting period to facilitate functional planning, management and
Management control over all assets, liabilities, and government equity in the public
interest
• Provide financial information that is open and honest to the
public on the basis that the public has a right to know, openly and
Transparancy comprehensively, the government’s accountability for the
management of the resources entrusted to it, and obedience to the
laws and regulations
• Assist users in knowing the adequacy of government revenues in
Intergenerational the reporting period to cover all the expenditures allocated and
Balance whether future generations will be assumed to share the burden
of such expenditures
• Evaluating the performance of the reporting entity, especially in
Performance
the use of economic resources managed by the government to
Evaluation
achieve planned performance
THE PURPOSE OF GOVERNMENT FINANCIAL REPORTING

Government financial reporting should provide information useful to users in assessing

accountability and making decisions not only economic and social decisions but political decisions
by:
a) provide information about the source, allocation and use of financial resources;
b) Provide information about the adequacy current period receipts to cover all the expenditures;
c) Provide information on the amount of economic resources that are used in the activities of the
reporting entity and the results that have been achieved;
d) Provide information on how the reporting entity funds its activities and meets its cash needs;
e) Providing information on the financial position and condition of the reporting entity associated
with the sources of revenues, both short and long term, including those derived from taxation
and loans;
f) Providing information on changes in the financial position of the reporting entity, whether an
increase or decrease, as a result of activities undertaken during the reporting period.
FINANCIAL REPORT COMPONENTS

• Budget Realization Report (LRA);

1

• Statement of Changes in the Excess Budget Balance (SAL)

2

• Statement of Operations (LO)

3

• Statement of Changes in Equity (LPE);

4

• ) Balance Sheet;
5

• Statement of Cash Flows (LAK);

6

• Notes to the Financial Statements (CaLK).

7
9
 BASIC ASSUMPTIONS

1.ENTITY 1.ENTITY
INDEPENDENCE CONTINUITY

MONETARY
MEASUREMENT
QUALITATIVE CHARACTERISTICS OF FINANCIAL
REPORTS

RELEVANT

RELIABLE

1.COMPARABLE

1.UNDERSTANDABLE
PRINCIPLES OF ACCOUNTING AND FINANCIAL
REPORTING

5.ACCOUNTI 5.HISTORI 5.REALIZ

NG BASIS CAL COST ATION

1.SUBSTANCE 1.PERIOD 1.CONSIS

OVER FORM ICITY TENCY

1. FAIR
1. FULL
PRESENTATI
DISCLOSURE
ON
 RELEVANTAND
RELEVANT ANDRELIABLE
RELIABLEINFORMATION
INFORMATION
CONSTRAINTS
CONSTRAINTS

MATERIALITY

CONSIDERATION OF COSTS AND

BENEFITS

BALANCE BETWEEN QUALITATIVE

CHARACTERISTICS