Reconciliation of budgeting and accounting

Abstract

Budget execution statements and accrual accounting financial statements are complementary but report different revenues, expenses, and surplus amounts. To make these differences understandable, IPSAS requires a reconciliation of the actual amounts in the budget execution statement with the financial performance or cash flow statements. This article analyses financial statements and demonstrates that entities approach this reconciliation differently, making a comparison challenging. This article recommends that more extensive guidance should be issued to improve comparability.