Government departments are now required to report in accordance with AAS 29 'Financial reporting by government departments'.The broad effect of the requirements of this standard is to:
A) Emphasise the reporting of the service role of government departments.
B) Emphasise the use of cash accounting by government departments.
C) Introduce accrual accounting and an emphasis on profit.
D) Introduce value added reporting.
E) None of the given answers.

Question

Quizplus · Accepted Answer

AAS 29 requires government departments to use accrual accounting instead of cash accounting, and to report on an accrual basis. This includes reporting on the full economic impact of transactions, rather than just the cash flow impact. There is also an emphasis on reporting on comprehensive income, which includes both operating revenue and expenses as well as non-operating items such as net gains or losses on non-financial assets. However, there is no requirement for profit to be emphasised, as government departments do not operate for profit.

Government Departments Are Now Required to Report in Accordance with AAS