Posted by Tim Irwin
Government finances are affected by many kinds of changes. Most obviously, there are cash inflows and cash outflows. But even in the absence of such flows, government finances are rarely static: the government may be accumulating unpaid bills, for instance, or it may hold shares and bonds whose value is surging or plummeting.
Even if there are no changes in the value of the government’s financial assets and liabilities, the government may be developing or running down its physical assets. It may be building new roads, for instance, or allowing them to deteriorate through lack of maintenance.
- The Whole Elephant: A Proposal for Integrating Cash, Accrual, and Sustainability-Gap Accounts&uri=http%3A%2F%2Fblog-pfm.imf.org%2Fpfmblog%2F2016%2F02%2Fthe-whole-elephant-a-proposal-for-integrating-cash-accrual-and-sustainability-gap-accounts.html" class="first">Email this
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