Abstract
Since the introduction of the European Semester, the endorsement of the “Six Pack” and the Directive 85/2011 (European Council Secretariat, Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States), harmonization and mutual influences among Government Accounting (GA), Government Finance Statistics (GFS), and IPSAS have been addressed continuously at the European level. The main issue seems to be “if and how” the IPSAS may integrate the GFS’ various purposes, within the entire financial reporting process. After focusing on the role played by accrual accounting in the public sector and the financial accountability needs in the European context, this chapter presents an argument centered on a systematic relationship among different accounting systems, in the light of the current European legislation. It highlights, from a qualitative standpoint, the impact of that relationship on users and their information needs. A breakdown into the revenue recognition practice, as an explanatory approach on the subject, is provided. The results raised the cue to bring out an unavoidable and structural trade-off, recognizable between the harmonization among different accounting systems and the flexibility within each of them. As such, this is discussed as a purposeful starting point, useful to figure out future improvements of the public sector accounting rules across Europe. At the end, progresses by this side could help European Union countries in effectively contributing to the achievement of some sub-targets and indicators included in the Sustainable Development Goal (SDG) 17—Partnership for the Goals—promoted by the United Nations (UN) in 2015.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
References
Anessi Pessina E, Nasi G, Steccolini I (2007) Effects of budgetary accruals accounting coexistence: evidence form Italian local government. Financ Account Manag 23(2):113–131
Anessi Pessina E, Nasi G, Steccolini I (2008) Accounting reforms: determinants of local government’s choices. Financ Account Manag 24(3):321–342
Arnaboldi M, Lapsley I (2009) On the implementation of accrual accounting: a study of conflict and ambiguity. Eur Account Rev 18(4):809–836
Barton A (2007) Accrual accounting and budgeting systems issues in Australian Governments. AAR 17(41):38–50
Barton A (2011) Why governments should use the government finance statistics accounting system. Abacus 47(4):411–445
Biondi Y (2014) Harmonising European public sector accounting standard (EPSAS): issue and perspectives for Europe’s economy and society. Account Eco Law 4(3):165–178
Blondal JR (2003a) Accrual accounting and budgeting: key issues and recent developments. OECD J Budg 3(1):43–59
Blondal JR (2003b) Budget reform in OECD member countries: common trend. OECD J Budg 2(4):8–25
Bromwich M, Lapsley I (1997) Decentralisation and Management in Central Government: recycling old ideas. Financ Account Manag 13(2):181–201
Brostrom B (1998) Accrual accounting, politics and politicians. Financ Account Manag 14(4):319–333
Brusca I, Martinez JC (2016) Adopting international public sector accounting standard: a challenge for modernizing and harmonizing public sector accounting. Int Rev Adm Sci 82(4):724–744
Burns RC, Lee RDJ (2004) The ups and down of state budget process reform: experience of three decades. Public Budget Finance 24(3):1–19
Carlin TM (2005) Debating the impact of accrual accounting and reporting in the public sector. Financ Account Manag 21(3):309–336
Caruana J (2016) Shades of governmental financial reporting with a national accounting twist. Account Forum 40(3):153–165
Christensen M (2003) Without ‘reinventing the wheel’: business accounting applied to the public sector. Austral Account Rev 13(30):22–27
Christensen M, Parker L (2010) Using ideas to advance professions: public sector accrual accounting. Public Money Manage 26(3):246–266
Christiaens J, Rommel J (2008) Accrual accounting reforms: only for businesslike (part of) governments. Financ Account Manag 24(1):59–75
Cohen S, Karatzimas S (2016) Modernizing government accounting standards in Greece: a case of garbage can decision making. Public Money Manage 36(3):173–180
Connoly C, Hydman N (2006) The actual implementation of accruals accounting: caveats from a case within the UK public sector. Account Audit Accoun 19:272–290
Dabbicco G (2015) The impact of accrual-based public accounting harmonization on the EU macroeconomic surveillance and government’s policy decision-making. Int J Public Admin 38(4):253–267
Dabbicco G (2018) A comparison of debt measures in fiscal statistics and public sector financial statements. Public Money Manage 38(7):511–518
Dabbicco G, D’Amore M (2016) Debate: accounting for macroeconomic surveillance in Europe. Public Money Manage 36(3):162–164
Dasì RM, Montesinos V, Murgui S (2016) Government financial statistics and accounting in Europe: is ESA 2010 improving convergence? Public Money Manage 36(3):165–172
Dasì RM, Montesinos V, Vela Bargues JM (2018) Towards convergence of governmental financial statistics and accounting in Europe at central and local levels. Span Account Rev 21(2):140–149
Dutta S, Reichelstein S (2005) Accrual accounting for performance evaluation. Rev Account Stud 10(4):527–552
European Central Bank (2010) Government finance statistics guide. https://www.ecb.europa.eu/pub/pdf/other/governmentfinancestatisticsguide201003en.pdf. Accessed 13 Mar 2019
European Commission (2011) Proposal for a Regulation of the European Parliament and of the Council on the strengthening of Economic and Budgetary Surveillance of Member States Experiencing or Threatened with Serious Difficulties with Respect to their Financial Stability in the Euro Area. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52011PC0819&from=EN. Accessed 16 Mar 2019
European Commission (2013) Report from the Commission to the Council and the European Parliament. Towards implementing harmonized public sector accounting standards in Member States. The suitability of IPSAS for the Member States. Brussels, Belgium. https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2013:0114:FIN:EN:PDF. Accessed 17 Mar 2019
European Council Secretariat (2011) Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States. https://eur-lex.europa.eu/legal-content/ET/TXT/PDF/?uri=CELEX:32011L0085&from=GA. Accessed 20 Mar 2019
Eurostat (1996) European system of accounts. Publications Office of the European Union, Luxembourg
Eurostat (2010) European system of accounts. Publications Office of the European Union, Luxembourg
Eurostat (2014) Manual on government deficit and debt. Publications Office of the European Union, Luxembourg
Giosi A, Brunelli S, Caiffa M (2015) Do accrual numbers really affect financial market? An empirical analysis of ESA accounts across the EU. Int J Public Admin 38:297–310
Goldman F, Brashares E (1991) Performance and accountability: budget reform in New Zealand. Publ Budg Financ 11(4):75–85
Gray A, Jenkins W (1993) Codes of accountability in the new public sector. Account Audit Account J 6(3):52–67
Guthrie J (1998) Application of accrual accounting in the Australian public sector - rhetoric or reality. Financ Account Manag 14(1):1–19
Guthrie J, Parker L, English LM (2003) A review of new public financial management change in Australia. Austral Account Rev 13(30):3–9
Heald D (2017) Challenges for European public sector accounting. Account Eco Law 4:131–135
Hepworth N (2003) Preconditions for successful implementation of accrual accounting in central government. Public Money Manage 23(1):37–44
Humphrey C, Miller P, Scapens RW (1993) Accounting, accountability and the ‘new’ UK public sector”, editorial for a dedicated issue on the UK public sector. Account Audit Accoun 6(3)
International Monetary Fund (2001) Manual on government finance statistics. Washington, USA
International Monetary Fund (2012) Manual on government finance statistics. Draft revision. USA, Washington
International Public Sector Accounting Standard Board –IFAC (2014) The conceptual framework for general purpose financial reporting by public sector entities, New York
Jones R (1998) The conceptual framework of resource accounting. Public Money Manage 18(2):11–16
Jorge S, Jesus MA, Laurano R (2014) Exploring determinant factors of differences between governmental accounting and national accounts budgetary balances in EU member state. TRAS:34–54
Jorge S, Jesus MA, Laurano R (2016) Governmental accounting maturity toward IPSASs and the approximation to National Accounts in the European Union. Int J Public Admin 39(12):976–988
Jorge S, Jesus MA, Laurano R (2018) Budgetary balance adjustments from governmental accounting to national accounts in EU countries: can deficit be prone to management? Publ Budg Financ 38(4):97–116
Kober R, Lee J, Ng J (2010) Mind your accruals: perceived usefulness of financial information in the Australian public sector under different accounting systems. Financ Account Manag 26(3):267–298
Kober R, Lee J, Ng J (2013) GAAP, GFS and AASB 1049: perceptions of public sector stakeholders. Account Finance 53(2):471–496
Kuhn TS (1962) The structure of scientific revolution. University of Chicago Press, Chicago
Lande E, Rocher S (2011) Prerequisites for applying accrual accounting in the public sector. Public Money Finance 31(3):219–222
Lapsley I, Wright E (2004) The diffusion of management accounting innovations in the public sector: a research agenda. Manage Account Res 15(3):355–374
Lapsley I, Mussari R, Paulsson G (2009) On the adoption of accrual accounting in the public sector: a self-evident and problematic reform. Eur Account Rev 18(4):719–723
Laughlin R (2008) A conceptual framework for accounting for public-benefit entities. Public Money Manage 28(4):247–254
Lickierman A (2000) Changes to managerial decisional taking in UK central government management. Account Res 11(2):253–261
Mader D, Vitters C, Obbagy J (2018) Restoring trust in government through transparency by using accounting and enforcing accountability. J Government Financ Manage 67(3):43–45
Mayston D (1992) Capital accounting, user needs and the foundations of conceptual framework for public sector reporting. Financ Account Manag 8(4):227–248
Monsen N (2008) Governmental accounting in Norway: a discussion either implications for international development. Financ Account Manag 24(2):151–167
Montesinos V, Vela JM (2000) Governmental accounting in Spain and the European monetary union: a critical perspective. Financ Account Manag 16(2):129–150
Myers J (1959) The critical event and recognition of net profit. Account Rev 34(4):528–532
Newberry S (2002) Intended or unintended consequences? Resource erosion in New Zealand’s government departments. Financ Account Manag 18(4):309–330
Partington D (2002) Essential skill for management research. Sage, London
Paulsson G (2006) Accrual accounting in the public sector: experiences from the central government in Sweden. Financ Account Manag 22(1):47–62
Pendlebury M, Karbhari Y (1998) Resource accounting and executive agencies. Public Money Manage 18(2):29–33
Pina V, Torres L (2003) Reshaping public sector accounting: an international comparative view. Can J Adm Sci 20(4):334–350
Pina V, Torres L, Yetano A (2009) Accrual accounting in EU local governments: one method, several approaches. Eur Account Rev 18(4):765–807
Popper K (2002) The logic of scientific discovery. Routledge, London
Rutherford BA (1992) Developing a conceptual framework for central government financial reporting: intermediate users and indirect control. Financ Account Manag 8(4):265–280
Ryan C, Guthrie J, Day R (2007) Politics of financial reporting and the consequences for the public sector. Abacus 43(4):474–487
Scheers B, Sterck M, Bouckaert G (2005) Lessons from Australian and British reforms in results-oriented financial management. OECD J Budg 5(2):133–162
Sforza V, Cimini R (2017) Central government accounting harmonization in EU member states: will EPSAS be enough? Public Money Manage 37(4):301–308
Sprouse RT, Moonitz M (1962) A tentative set of broad accounting principles for business enterprises. AICPA
United Nations (UN), World Bank, OECD (Organization for Economic Co-operation and Development), EC (European Commission) and IMF (International Monetary Fund) (1993) System of National Accounts. Brussels, Belgium: Luxembourg; USA: New York and Washington DC; France: Paris; United Nations; World Bank; Organization for Economic Co-operation and Development; Commission of the European Communities and International Monetary Fund
United Nations (UN), World Bank, OECD (Organization for Economic Co-operation and Development), EC (European Commission) and IMF (International Monetary Fund) (2008) System of National Accounts. Brussels, Belgium: Luxembourg; USA: New York and Washington DC; France: Paris; United Nations; World Bank; Organization for Economic Co-operation and Development; Commission of the European Communities and International Monetary Fund
Vinnari EM, Näsi S (2008) Creative accrual accounting in the public sector: ‘milking’ water utilities to balance municipal budget and accounts. Financ Account Manag 24(2):97–116
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this chapter
Cite this chapter
Giosi, A. (2020). Public Sector Accounting and the Sustainability of Public Finance Among Accounting Bases, Harmonization, and Flexibility Concerns. In: Brunelli, S., Di Carlo, E. (eds) Accountability, Ethics and Sustainability of Organizations. Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application. Springer, Cham. https://doi.org/10.1007/978-3-030-31193-3_8
Download citation
DOI: https://doi.org/10.1007/978-3-030-31193-3_8
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-31192-6
Online ISBN: 978-3-030-31193-3
eBook Packages: Business and ManagementBusiness and Management (R0)