Accounting standards are guidelines that influence transparent and valid record-keeping (Elliott and Elliott 50). As a result, accountants act in accordance with several accounting principles to compute and publish financial statements (Evans 78). Consequently, a unified accounting standard that provides an interpretation of government expenditure is called the standards of government and accounting reports. By implication, government institutions act in accordance with the approved guidelines when publishing government expenditures and financial statements (Hawkins 11). Thus, an accountant can publish reports of non-spendable fund balance, a restricted fund balance, committed fund balance, assigned and unassigned fund balance. Accountants believe the year-end inventory without comparable fund balance must be counterbalanced with the non-spendable fund balance. By implication, accountants must balance the assets with liabilities (Jones 315).
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Effective implementation of accounting standards influences budgetary control (Gray and Owen 145). Thus, holding funds are reported in government-wide statements to improve financial reporting. By implication, the appropriated funds for a fiscal year, which includes capital projects and other government funds must be displayed in a consolidated government statement.
The fund financial statements reveal consolidated reports on hold funds, debt services, revenue, tax services, and capital projects (Howes 20). To understand the implication of effective budgetary control, we must highlight the importance of the government-wide statement.
- It indicates the financial position of the government. By implication, the account statement displays a devolved or amended financial position.
- It displays government revenues and its operating results.
- The government-wide statement provides insight into its capacity to fund current-year expenditures.
- The statement displays government expenditures in capital projects, debt services and other appropriations.
- The statement is an economic indicator that assists financial analysts.
- The government-wide statements provide a comparison criterion between authorities.
- The government-wide statements display the services allocated to its citizens.
Elliot, Barry, and Elliott Jamie. Financial Accounting and Reporting, Edinburgh Gate, England: Pearson Press, 2011. Print.
Evans, Cary. “Sustainability: the bottom line,” Accountancy 133.1450 (2012): 78. Print.
Gray, Rob, and Owen David. Accounting and Accountability: Changes and Challenges in Corporate Social and Environmental Reporting, Basingstoke, England: Prentice Hall, 2010. Print
Hawkins, David. Corporate Social Responsibility: Balancing Tomorrow’s Sustainability and Today’s Profitability, Basingstoke, England: Palgrave MacMillan, 2013. Print.
Howes, Rupert. Environmental Cost Accounting: An Introduction and Practical Guide, London: CIMA, 2002. Print.
Jones, Michael. “Accounting for Biodiversity,” British Accounting Review 28.11 (2010): 304-355. Print.