KUALA LUMPUR (Oct 18): The government is committed to adopt greater transparency in public finance reporting by accelerating the full implementation of accrual accounting.
To recap, Finance Minister Lim Guan Eng has said the government is committed to a shift from cash-based accounting standards to accrual accounting standards by 2021.
The accrual accounting will provide comprehensive financial reporting, which includes government guarantees, contingent and future liabilities, as well as other commitments.
“Under this method, revenue and expenses will be recorded when earned and incurred respectively. Obligations such as debt, contingent liabilities and financial leases will also be accounted for, when the obligations are undertaken, enabling a more comprehensive management of public finance,” said the Mid-term Review of the 11th Malaysia Plan 2016-2020 report.
The government said efforts to implement accrual accounting through the Integrated Government Financial Management and Accounting System (iGFMAS) will be expedited in the remaining 11MP period.
“The government aims to consolidate financial accounts with Minister of Finance Incorporated's financial statements, through accrual accounting,” the report said, suggesting this will add depth to the accountability and transparency of public sector funds and resources management.