Accrual accounting practices from a statistical viewpoint Léonard Haakman 27 February 2012

Financial reporting standards in the Netherlands General standards for private corporations: Standards financial reporting in Title 9 Book 2 of Civil Code (BW2) Additional guidelines from Dutch Accounting Standards Board (DASB) EU-IFRS Specific standards for government institutions: cash accounting (State) accrual accounting: specific regulations Municipalities, provinces, police districts accrual accounting according to Civil Code and DASB Railway infrastructure provider Prorail, schools, universities Accrual accounting practices from a statistical viewpoint

Experience cash accounting Pros: Data available shortly after reporting period “Easy” to interpret Cons: Need to correct for accrual recording, only limited insight in corrections (about 20 corrections identified in the NL) Need to discriminate between financial and non-financial transactions No recording of non-cash transactions No concept of economic ownership No integrated balance sheet Accrual accounting practices from a statistical viewpoint

Experience accrual accounting Pros: Time of recording close to ESA95 Clear distinction financial and non-financial transactions Recording complex transactions similar to ESA95 (not always!) Concept of economic ownership Cons: Sometimes difficult to interpret, large variety of accrual accounting rules Need to identify and to correct for provisions and reserves booked as revenues/expenses Need to identify and to correct for (un)realized holding gains/losses Recognition of revenues/expenses and assets/liabilities sometimes not clear (-> more harmonization!) Accrual accounting practices from a statistical viewpoint

Lessons to be learnt More harmonization of accrual accounting within countries (and within Europe) More harmonization of accounting standards between financial reporting and statistics Statistical adjustments always needed but try to minimize them (IPSAS/GFS convergence project) Accrual accounting practices from a statistical viewpoint