Use an Appropriate Basis

Meanwhile, the private sector will focus more on the company's financial and operational performance, with an emphasis on profitability, liquidity and solvency. 5. Settings and Standards The public sector will usually follow public sector accounting standards which are often different from private sector accounting standards. For example, standards such as (IPSAS) or Generally Accepted Government Auditing Standards (GAGAS) in the United States. Meanwhile, the private sector will follow more general accounting standards such as International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP) in the United States.

It is important to remember that these differences may vary between countries, depending on the regulatory framework and accounting practices in place. Also read: Getting to Know the Limitations of Financial Reports and How Job Function Email Database to Overcome Them How to Make Public Sector Financial Reports How to Make Public Sector Financial Reports illustration of public sector financial reports. source envato Creating public sector financial reports involves several organized steps and complies with the public sector accounting standards applicable in a country.



The following are general guidelines for preparing public sector financial reports: 1. Understand the Public Sector Accounting Framework Understand the public sector accounting standards that apply in your region or country. An example of an international standard that is commonly used is the International Public Sector Accounting Standards (IPSAS). 2. Identify and Classify Fund Sources Determine the sources of funds used by the public sector, such as taxes, revenue from services, and other public funds. Classify clearly between income and expenditure. Accounting Choose between cash or accrual basis of accounting, depending on applicable policies and regulations.