iup sap

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5/2/12

GOVERNMENT ACCOUNTINGSTANDARDS (SAP)IUP. NOVEMBER 18th 2011

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REGULATION AND CONTROL

Business:

Able to modify or withdraw unprofitable goods and services from

the marketplace

Responds to value of resources provided to type and quality of goodsand services provided

Profit motive and measurement result in an allocation andregulation of resources vs. goods and services provided

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REGULATION AND CONTROL

G&NP:

Not able to modify or withdraw some unprofitable goods andservices from the marketplace

Value of resources provided often not related to type and quality ofgoods and services provided

Goods and services provided often unique and without charge or ata token charge

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G&NPs DIFFICULTY INEVALUATING RESULTS

No market supply and demand test for value of services

Indirect relationship between resource providers and servicerecipients

Absence of profit test

Forced resource contributions (taxation)

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G&NP OPERATIONS REGULATED &CONTROLLED BY:

Organization structure

Governance elected, line of authority

Personnel policies and procedures Who hires / fires, compensation

Source of financial resources

Taxes, debt and rate limits

(Continued)

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G&NP OPERATIONS REGULATED &CONTROLLED BY:

Use of financial resources

Restricted, budgeting, purchasing

Accounting and financial reporting

Structure, reporting types, recipients

Auditing

Who, frequency, scope, grants

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ACCOUNTING & FINANCIALREPORTING OBJECTIVES

Making resource allocation decisions

Setting goals and objectives

Directing and controlling resources

Reporting on resource custodianship

Contributing to efficiency and effectiveness

American Accounting Association

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Objectives address needs of external users of financialinformation

Managers and other internal users have specialized needs forfinancial information

FASB - Statement of Financial Accounting Concepts No. 4

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For general purpose external financial reporting:

Making resource allocation decisions

Assessing services and ability to continue

Assessing management stewardship responsibilities andperformance

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FINANCIAL REPORTINGINFORMATION NEEDS

Economic resources, obligations, net resources

Effects of transactions / events on resources

Performance measurement of resource changes

Service efforts and accomplishments

Sources of cash flows and liquidity

FASB - Statement of Financial Accounting Concepts No. 4

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ACCOUNTING & FINANCIAL REPORTINGCHARACTERISTICS

Remember

Accounting

is a service function and

must meet user information needs in a givenenvironment

Accounting control provisions in

G&NP environment

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Therefore, the two most important legal andadministrative controls affecting governmental andnonprofit accounting and financial reporting

1. Funds and fund accounting

2. Budgets and appropriations

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What are key differences of government and nonprofitfrom business accounting & financial reporting?

Use of fund accounting

Use of special accounting for restricted activities

Presentation of budgetary comparisons in connection with regularfinancial reporting

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SAP Introduction

Government Accounting Standards Committee, referred toKSAP

Statement of Governmental Accounting StandardsInterpretation, referred to IPSAP, are clarifications,explanations and further descriptions of the SAP statementissued by KSAP

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KSAP consist of:

1. Governmental Accounting Standards Consultative Committee

(Consultative Committee)

Assigned to provide consultation and / or opinion in theformulation of the concept of the draft GovernmentRegulation on Government Accounting Standards.

2. Governmental Accounting Standards Working Committee(Working Committee).

Assigned to prepare, formulate and arrange the Draft ofGovernment Regulation on Government Accounting

Standards

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Strategies and Goals of KSAP

KSAP aims to improve accountability and reliability ofgovernment financial management through the preparationand development of governmental accounting standards,including supporting the implementation of the standard

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Governmental Financial Report

Government financial report intended to meet thegeneral purpose financial reporting, but not to meet thespecific needs of the user itself.

the term "financial statements" includes all the reportsand the various explanations that follow.

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Governmental AccountingStandards (SAP)

In accordance with UU no. 17 of 2003 on State Finance,SAP stipulated by Government Regulation, which state andlocal governments must applied.

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Scope

SAP implemented in the government, i.e. central, regional,

and organizational units within the central / local, or under thelegislation referred to an organizational unit shall present itsfinancial statements. Limitations of the SAP will be stated.

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SAP Preparation Process

1 Identify topics to be developed into a standard

2 Establishment of working group (Working Group) in the KSAP

3 Research by the working group

4 Writing the SAP draft by working group

5 Discussion of the draft by the working committee

6 Draft decision to be published

7 The launch of the SAP draft

8 Limited hearings and public hearings

9 Discussion responses to the SAP draft

1 Finalizing standards

f h

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Determination of theGovernmental Accounting

StandardsBefore applied to be government regulation, KSAP

through the government, requesting BPK RI to take thefinal draft of SAP into consideration.

Then Consultative Committee proposes to the Presidentthe final draft of SAP to be PP through the Finance Minister.

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Statement of Governmental AccountingStandards (PSAP) PP 24/2005

PSAP. 01 Presentation of Financial Statements

PSAP. 02 Budget Realizations

PSAP. 03 Cash Flows Statements

PSAP. 04 Notes to Financial Statements (CALK)

PSAP. 05 Accounting for Inventories

PSAP. 06 Accounting for InvestmentsPSAP. 07 Accounting for Fixed Assets

PSAP. 08 Construction in Progress

PSAP. 09 Accounting for Liabilities

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CONSTITUTION

GOVERNMENT

BPK - RI

SETTING

INFRASTRUCTURE

MANAGEMENT RESPONSIBILI

TY

CONSIDERATIONS

OF SAP

CONSIDERATION

SOF PP SPI

RECEIVINGAUDITORREPORT

RECEIVING

TREASURERREPORT

AUDIT

FINANCIAL

STATEMENT

PERFORMANCE

SPECIFICATIO

N

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