Accrual Accounting in the Australian Government

Abstract

This chapter analyses the experience of the Australian government in converting to accrual accounting. The adoption of accrual reporting by governments in Australia represents an important step in Australia's reform initiative to develop a more businesslike reporting model for the government departments—a model that accounts for the full cost of service delivery. Accrual accounting has provided a more comprehensive measure, over cash accounting, of the total activity of the government and the long-term effects of current policy, thereby enhancing governments' fiscal transparency and accountability. Accrual accounting has also been responsible for bringing about sustainability and sound fiscal management, and providing policymakers with information about the financial effects of current policies on future generations.