Tuesday, 4 November 2014

Accrual Accounting


Malaysia decides to switch to accrual accounting from the current cash-based accounting system in the public sector.

Accrual accounting takes into account more than just cash flows, but all the Government’s assets and liabilities, including off-balance items as well as pension obligations for public servant.

The real issue about how strong a Government’s balance sheet is not determined by the level of its debt to gross domestic product, or GDP, but the actual net worth of the Government Net worth was a better gauge of the Government’s fiscal position as it took into account all the assets that the state had against its total liabilities.

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