Posted by John Zohrab
From the perspective of fiscal transparency, accrual budgeting (AB) is superior to cash budgeting, because it facilitates the management of the budget in terms of the full resource implications of policies and programs and provides a much wider set of fiscal indicators. A cash budget is managed in terms of cash flows and balances whereas, in addition, an accrual budget takes into account accrued expenses and revenues, as well as the full range of assets, and liabilities and net worth.
However, implementing AB is generally perceived to entail risks and complexities. This is presumably why, starting in 1989, only a handful of countries have so far implemented it in central government: Australia, Austria, Canada, Denmark, Iceland, New Zealand, Switzerland and the United Kingdom. It is also presumably why most countries prefer to stick with cash budgeting. So why is Kazakhstan considering the introduction of AB?