Abstract
The information prepared in accordance with the national accounts and public finance statistics criteria plays a decisive role in evaluating and comparing the financial sustainability of governments in the European Union (EU). As national accounts are prepared on the basis of information generated by governmental reporting systems, the elaboration of the information requires adjustments due to the lack of comparability of accounting systems. The chapter contains an analysis of the main differences between the two systems and the adjustments required, as well as their importance for EU countries. It includes a study of the level of correlation between the size of the adjustments and the accounting maturity of the countries, evidencing that the adjustments are not smaller in countries with higher accounting maturity.
The analysis carried out shows that in order to increase the comparability of data and therefore of financial sustainability ratios, efforts should be made in two directions: a conciliation between the methodologies used in national accounts and governmental accounting, and the harmonization of governmental accounting between EU countries. The chapter concludes with a reference to the role of European Public Sector Accounting Standards in this regard.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
References
Barton, A. (2011). Why Governments Should Use the Government Finance Statistics Accounting System. Abacus, 47(4), 411–445.
Bos, F. (2007). Use, Misuse and Proper Use of National Accounts Statistics. Available at https://mpra.ub.uni-muenchen.de/2576/1/MPRA_paper_2576.pdf
Brown, K. W. (1993). The 10-Point Test of Financial Condition: Toward an Easy-to-Use Assessment Tool for Smaller Cities. Government Finance Review, 9(6), 21–26.
Brusca, I., Caperchione, E., Cohen, S., & Manes Rossi, F. (Eds.). (2015). Public Sector Accounting and Auditing in Europe. The Challenge of Harmonization. Basingstoke/New York: Palgrave Macmillan.
Canadian Institute of Chartered Accountants. (1997). Indicators of Government Financial Condition Research Report. Toronto.
Cohen, S., & Karatzimas, S. (2015). Debate: Reforming Greek Government Accounting. Public Money and Management, 35(3), 178–180.
Christiaens, J., Vanhee, C., Manes Rossi, F., Aversano, N., & Van Cauwenberge, P. (2015). The Effect of IPSAS on Reforming Governmental Financial Reporting: An International Comparison. International Review of Administrative Sciences, 81(1), 158–177.
Dasí, R., Montesinos, V., & Murgui, S. (2013). Comparative Analysis of Governmental Accounting diversity in the European Union. Journal of Comparative Policy Analysis: Research and Practice, 15(3), 255–273.
Dasí, R., Montesinos, V., & Murgui, S. (2014). La convergencia de los sistemas de contabilidad pública en Europa como escenario para el nuevo Sistema de Cuentas Nacionales. Revista Española de Financiación y Contabilidad, 164, 43(4), 424–448.
Dasí, R., Montesinos, V., & Murgui, S. (2016). Government Financial Statistics and Accounting in Europe: Is ESA 2010 Improving Convergence? Public Money and Management, 36(3), 165–172.
European Commission. (2009). Communication From the Commission to the European Parliament and the Council “Long-Term Sustainability of Public Finances for a Recovering Economy” https://ec.europa.eu
European Commission. (2013). Report from the Commission to the Council and the European Parliament. Towards Implementing Harmonised Public Sector Accounting Standards in Member States. The Suitability of IPSAS for the Member States. http://eur-lex.europa.eu
European Commission. (2016). Fiscal Sustainability Report 2015. https://ec.europa.eu
European Commission. (2017). European Semester Thematic Factsheet. Sustainability of Public Finances. https://ec.europa.eu
Eurostat. (2002). Manual on Government Deficit and Debt. http://ec.europa.eu/eurostat
Eurostat. (2014a). Manual on Measuring Research and Development in ESA 2010. http://ec.europa.eu/eurostat
Eurostat. (2014b). Manual on the Changes Between ESA 95 and ESA 2010. http://ec.europa.eu/eurostat
Eurostat. (2014c). Manual on Government Deficit and Debt. Implementation of ESA 2010. http://ec.europa.eu/eurostat
Eurostat. (2018). Government Finance Statistics and EDP Statistics. http://ec.europa.eu/eurostat
Groves, S. M., Nollenberger, K., & Valente, M. G. (2003). Evaluating Financial Condition: A Handbook for Local Government (4th ed.). Washington DC: International City/County Manager Association, ICMA.
Honadle, B. W., Costa J. M., & Cigler B. A. (2004). Fiscal Health for Local Governments. Amsterdam: Elsevier.
International Monetary Fund. (2014). Government Finance Statistics Manual 2014, GFSM 2014. https://www.imf.org
IPSASB. (2012). IPSASs and Government Financial Statistics Reporting Guidelines. Consultation Paper. https://www.ifac.org
IPSASB. (2013). Reporting on the Long-Term Sustainability of Public Finances. Recommended Practice Guideline (RPG). https://www.ifac.org
IPSASB. (2014). Process for Considering GFS Reporting Guidelines During Development of IPSASs. Policy Paper. https://www.ifac.org
Jesus, M. A., & Jorge, S. (2015). Governmental Budgetary Reporting Systems in the European Union: Is the Accounting Basis Relevant for the Deficit Reliability? International Review of Administrative Sciences, 81(1), 110–133.
Jesus, M. A., & Jorge, S. (2016). Accounting Basis Adjustments and Deficit Reliability: Evidence From Southern European Countries. Revista de Contabilidad, 19(1), 77–88.
Jones, R., & Caruana, J. (2014). A Perspective on the Proposal for European Public Sector Accounting Standards, in the Context of Accruals in UK Government Accounting. Accounting, Economics and Law, 4(3), 265–282.
Jorge, S., Jesus, M. A., & Laureano, R. M. (2014). Exploring Determinant Factors of Differences Between Governmental Accounting and National Accounts Budgetary Balances in EU Member States. Transylvanian Review of Administrative Sciences, 10, 34–54.
Jorge, S. M., Jesus, M. A., & Laureano, R. M. (2016). Governmental Accounting Maturity Toward IPSASs and the Approximation to National Accounts in the European Union. International Journal of Public Administration, 39(12), 976–988.
Lüder, K. (2000). National Accounting, Governmental Accounting and Cross-country Comparisons of Government Financial Condition. Financial Accountability and Management, 16(2), 117–128.
Manes Rossi, F., Cohen, S., Caperchione, E., & Brusca, I. (2016). Harmonizing Public Sector Accounting in Europe: Thinking Out of the Box. Public Money and Management, 36(3), 189–196.
PwC. (2014). Collection of Information Related to the Potential Impact, Including Costs, of Implementing Accrual Accounting in the Public Sector and Technical Analysis of the Suitability of Individual IPSAS Standards. www.pwc.be
Sforza, V., & Cimini, R. (2017). Central Government Accounting Harmonization in EU Member States: Will EPSAS be Enough? Public Money and Management, 37(4), 301–308.
Vanoli, A. (2010). Is National Accounting Accounting? National Accounting Between Accounting, Statistics and Economics. Comptabilités. Revue d’histoire des comptabilités, 1, 1–30.
Acknowledgements
The authors gratefully acknowledge financial support from the Generalitat Valenciana AICO/2017/092.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 The Author(s)
About this chapter
Cite this chapter
Montesinos, V., Dasí, R.M., Brusca, I. (2019). A Framework for Comparing Financial Sustainability in EU Countries: National Accounts, Governmental Accounting and the Challenge of Harmonization. In: Caruana, J., Brusca, I., Caperchione, E., Cohen, S., Manes Rossi, F. (eds) Financial Sustainability of Public Sector Entities. Public Sector Financial Management. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-06037-4_3
Download citation
DOI: https://doi.org/10.1007/978-3-030-06037-4_3
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-06036-7
Online ISBN: 978-3-030-06037-4
eBook Packages: Political Science and International StudiesPolitical Science and International Studies (R0)