In Government Finance Statistics (GFS), what is the difference between accrued and cash values, and can I add up these values or should I prefer one over the other?

GFS data is based on the Government Finance Statistics Manual (GFSM). The difference between accrued and cash values relates to the accounting rules used in recording these transactions. The two systems differ in respect of time of recording and coverage of transactions that will be recorded.

Cash data represents the recording of economic events at the time when the cash payment related to that event had occurred. In other words, it will record revenue and receipts in terms of asset and liability transactions when the actual cash moves. In terms of the coverage of transactions, the cash basis of accounting would only record transactions if it represented some kind of a cash flow - in other words, events such as donations in kind and debt forgiveness will not be recorded in a cash-based system since it does not represent any cash flows.

Accrual data represents the recording of economic events at the time the economic value was created, transformed, exchanged transferred, or extinguished. In other words, the economic events are recorded in the period in which they occurred, irrespective of whether cash was received or paid. In terms of coverage of transactions, an accrual basis of accounting would record all economic events, and would therefore include the value of transactions in kind (example: donations of food) and events such as debt forgiveness.

From the above explanations, one should not add these two values or mix cash and accrual data, because the two systems are reporting the same events, albeit at different times. Traditionally, the majority of governments recorded their government accounts only on a cash basis, however, modern thinking about fiscal management, and also, the GFSM proposes that governments record cash transactions in a Statement of Cash Flows to have information available on the liquidity of government finances, and also, to record accrual accounts to get an indication of the full spectrum of governments fiscal position. In the latter, transactions such as services received by government, but not yet paid and commitments such as government employee pension obligations would be included - these data could therefore differ significantly from the cash data.

More information on GFSM can be found here.

The GFS dataset can be found here.

Methodology

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  2. In Government Finance Statistics (GFS), what is the difference between accrued and cash values, and can I add up these values or should I prefer one over the other?
  3. Why are data from the country ministry of finance data page different from the ones in the Government Finance Statistics (GFS) dataset?
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  5. Why do the exports of country A to country B not equal to the imports of country B from country A in the Direction of Trade Statistics (DOTS) dataset?
  6. How are reserve assets valued in the International Financial Statistics (IFS)?
  7. What explains differences between WEO and IFS data and/or the latest data available from the source?
  8. What does it mean when partner trade data in Direction of Trade Statistics (DOTS) are estimated?
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  10. Is there a breakdown of "other currencies" classification in the Currency Composition of Official Foreign Exchange Reserves (COFER) dataset?
  11. What are the components of the Gross Domestic Product (GDP) data series in International Financial Statistics (IFS)?
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  15. Are securities that a resident economy acquires from a nonresident as collateral under a reverse repurchase agreement or a securities lending agreement included in the resident economy’s Coordinated Portfolio Investment Survey (CPIS)?
  16. Can transactions be derived from the position data in the Coordinated Portfolio Investment Survey (CPIS)?
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  18. What determines if a country should be included in the “Export Earnings: Fuel” category in the Direction of Trade Statistics (DOTS) and the International Financial Statistics (IFS) datasets,
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  21. What accounts for the difference in annual government finance data between the Government Finance Statistics (GFS) and the International Financial Statistics (IFS)?
  22. In the Government Finance Statistics (GFS), what comprises the general government sector (GG) and the central government sector (CG)?
  23. What is the Fund’s legal framework for geographical coverage of data reporting?
  24. Are holdings of domestic securities covered in the Coordinated Portfolio Investment Survey (CPIS) database?
  25. Which exchange rate is used to convert Currency Composition of Official Foreign Exchange Reserves (COFER) data into U.S. dollars?
  26. Where do I find instructions on how to complete the FAS questionnaire?
  27. Where can I find more information on the FAS methodology?
  28. In terms of customer accounts for Other Financial Institutions, if the instrument used to raise fund is equity, what information should be provided?

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