Glossary

• Pages: 108-115

Page 108

Accounting basis: Defined in IFAC (2000b) as "the body of accounting principles that determine when the effects of transactions or events should be recognized for financial reporting purposes. It relates to the timing of the measurements made, regardless of the nature of the measurement." There are many variations of the accounting basis. IFAC identifies two basic reference points (cash and accrual) and two variations (modified cash and modified accrual).

Accounting system: The set of accounting procedures, internal mechanisms of control, books of account, and plan and chart of accounts that are used for administering, recording, and reporting on financial transactions. Systems should embody double entry bookkeeping, record all stages of the payments and receipts process needed to recognize accounting transactions, integrate asset and liability accounts with operating accounts, and maintain records in a form that can be audited.

Accrual accounting: Accrual accounting systems recognize transactions or events at the time economic value is created, transformed, exchanged, transferred, or extinguished, and all economic flows (not just cash) are recorded.

Accrual reporting: Reporting based on accrual accounting systems.

Advance release date calendar: A calendar that indicates the dates on which regular publications will be available to the public. Hence, the public will know in advance when certain statistics or data will be available.

Aid in kind: Flows of goods and services with no payment in money or debt instruments in exchange. In some cases, "commodity aid" goods (such as grain) are subsequently sold and the receipts are used in the budget, or more commonly through a special fund, for public expenditure.

Appropriations: An authority under a law given by the legislature to the executive to spend public funds for a specified purpose. Annual appropriations are made through annual budget laws. Supplementary budgets/appropriations are sometimes granted subsequent to the annual law if the annual appropriation is insufficient to meet the purpose. "Standing appropriation" is sometimes used for authority extending beyond a single budget year under separatePage 109 legislation (such as social security legislation). In some countries, such as the United States, the term "authorization" is used to denote a general law setting up a program and permitting appropriation but not giving any specific authority to spend. In most countries, agencies and departments require specific executive authorization ("apportionment, allotment, or warrant") to actually incur an obligation against an appropriation.

Assets: Any economic resource controlled by an entity as a result of past transactions or events and from which future economic benefits may be obtained. Types of financial assets include cash, deposits, loans, bonds, shares and other equities, financial derivatives, and accounts receivable. Examples of nonfinancial assets include buildings, machinery, equipment, inventories, valuables, land, subsoil mineral deposits, and leases.

Augmented balance: The overall balance plus any losses incurred by the central bank, and any issuance of government debt to recapitalize public financial institutions not recorded in the overall balance.

Budget calendar: A calendar indicating the key dates in the process of preparing and approving the budget. These would include the date the budget circular is issued, time period for discussing estimates with the ministries and departments, the date the executive budget is submitted to the legislature, legislative review including dates for budget hearings, and the date the budget appropriations bill should be passed by the legislature. There may be other important steps in the process, which varies by country.

Budget documentation: The annual budget presentation and the budget-supporting documents, including but not limited to background to policy proposals and discussion of fiscal risks, within-year budget reports for monitoring budget execution, and the final accounts.

Cash accounting: Cash accounting systems recognize transactions and events when cash is received or paid.

Cash reporting: Reporting based on cash accounting systems.

Central government: All government units that are agencies or instruments of the central authority of a country and that are covered by or financed through the budget or extrabudgetary funds at that level.

Commitments: In accounting usage, commitments refer to a stage in the expenditure process at which contracts or other forms of agreement are entered into, generally for future delivery of goods or services. A liability will not be recognized until delivery of the item, but the government is contractually committed to meeting the obligation once delivery is made. The term is also used in a more general, noncontractual sense to mean firm promises of the government made in policy statements.

Contingency funds or reserves: A separate fund or a budget provision set aside to meet unforeseen and unavoidable requirements that may arise during the budget year. Certain types of contingency (such as meeting loan guarantee obligations) may be specified as a potential use for such funds.

Page 110

Contingent...