During the 19808 the public sector in Australia experienced substantial change. The scope of the change ranged from formal organisational reviews and restructuring with its consequent reclassification and redesign of work to the implementation of financial management programs, all designed to improve the performance of government institutions.
The nature of these reforms highlighted the deficiencies of the financial information provided by the traditional cash accounting systems of government. Consequently, government leaders and senior bureaucrats recognised the need to move to the adoption of accrual accounting for all government agencies.
This research report will review the adoption and implementation of accrual accounting principles to the recognition of revenue in public sector accounting.
Chapter 1 of the paper identifies the reasons behind the recent reforms if1 public sector management. The discussion identifies the motives behind the push for the introduction of accrual accounting in public sector organisations.
Chapter 2 examines the move to introduce new accrual reporting guidelines for Commonwealth government departments. The discussion highlights the costs associated with this step.
Chapter 3 examines the conceptual framework developed to apply accrual accounting concepts to public sector organisations. Particular reference will be given to how these standards and accrual accounting concepts affect the identification of reporting entities and the recognition of the elements of accrual accounting.
Chapter 4 examines the development of the revenue recognition policy in a Commonwealth Government department, namely, the Australian recognition policy and Taxation revenue Office. The discussion reviews the reasons behind shows the likely effects the new standards and accrual accounting concepts will have on the existing policy.
Chapter 5 synthesises the main points of the paper and draws conclusions about the move to accru.al accounting In the public sector.