The Most Complete Purpose of Government Accounting Standards – The following is an explanation of the purpose of government accounting standards that you need to know, in order to get more complete information, let's look at the articles we have provided below.

In government, financial reporting for related parties is known as government financial accounting standards. This method of recording and bookkeeping is necessary to properly track government funds and assets.

If accountancy government is not carried out, of course state revenues and expenditures will not be recorded correctly and evenly. This recording and bookkeeping system must exist so that state finances and assets are properly and accurately recorded.

Definition of Government Accounting Standards

Accounting principles are used to structure and display various forms financial statements government, including Central Government Financial Statements (LKPP) and Regional Government Financial Statements (LKPD), under the umbrella of Government Accounting Standards (SAP)

Key reports, according to SAP, include:

  1. Budget Realization Report
  2. balance sheet
  3. Cash flow statement
  4. Notes to Financial Statements.

Definition of Government Accounting Standards

What is Government Accounting?

The term "government accounting standards" can be interpreted in various ways. One of them was stated by L. Suparwoto. He described accounting as a system or technique for measuring and managing financial transactions. After that, the company's internal and external stakeholders will be provided with information about the results of management efforts in the form of data.

Meanwhile, according to the American Accounting Association (AAA), accounting is the process of finding, measuring, and reporting economic information that allows for clear and solid judgments and choices for consumers of that information.

So, accounting is a good way for consumers to use facts or financial transactions to make decisions. Government accounting standards are meant to be used by state governments, in this case, the Indonesian government.

Basis for Application of Government Accounting Standards

The following is the basis for implementing Government Accounting Standards:

Cash Based

The basis of accounting used in government financial reports is the cash basis for recognizing revenues, expenses and financing in the budget realization report and the accrual basis for recognizing assets, liabilities and equity in the balance sheet.

Basis for Application of Government Accounting Standards

The accrual basis for the balance sheet means that the assets, liabilities and equity of the fund are recognized and recorded when the transactions occur. Or when environmental events or conditions affect government finances, regardless of when cash and cash equivalents are received or paid (PP No.71 of 2010).

Based on Accrual

In particular, the accrual-based government accounting standards, namely recognizing revenues, costs, assets, debts and equity in accrual-based financial reporting, as well as recognizing income, expenses and financing in reporting budget implementation based on the principles set out in the Articles of Association. APBN and APBD.

Simple Example in terms of Tax Management in the Company.

Accrual-Based If SAP is implemented in a government environment, including the central government, regional government, and organizational units within the central or regional government, if according to laws and regulations, the organizational unit is required to make financial reports (PP No. 71 of 2010).

Because accounting is an important component that supports the setting of government accounting standards in government accounting, it is important to know that keeping good accounting records will facilitate processing and reporting to the government.

Governments are more likely to have confidence in the businesses that use them. Tax administration in business is a basic illustration. If the company is able to manage finances and pay taxes on time, the government will recognize that your company has a strong reputation.

Make it easy for you to exchange work greetings with other companies. Conversely, if your company has a poor financial management system and is late paying taxes, the government will determine your company as a corporation with low credibility.

Finally, it's possible that your organization is having trouble collaborating with other businesses. To make this possible, it is very important to build a simple and practical accounting system.

Simple Example in terms of Tax Management in the Company.

Purpose of Government Accounting Standards

According to Nurlan Darise (2008: 39), the purpose of government accounting standards is used as a guideline for preparing accountability reports for the implementation of the APBN or APBD in the form of financial reports consisting of budget realization reports, cash flow reports, and comments to financial reports.

According to Indra Bastian (2010: 138), SAP intends to "increase the accountability and dependence of government financial management".

Based on the descriptions of the two experts regarding their objectives, it can be concluded that the purpose of SAP is to assist in the preparation of financial reports in the context of accountability for the implementation of the State Budget or Regional Budget so that government financial management is more accountable and reliable.

Government Accounting Standard Principles (SAP)

In Government Regulation no. 71 of 2010, eight accounting and financial reporting rules for SAP are outlined.

These principles include the basis of accounting, the concept of historical value, the principle of realization, the principle of substance over formal form, the principle of periodicity, the principle of consistency, the principle of complete disclosure and the principle of fair presentation.

Accounting Base

The basis of accounting is used in government financial reports in the form of operational reports and accruals for recognition of income, expenses, assets, liabilities and equity, in accordance with the concept of Government Accounting Standards (SAP).

In the event that laws and regulations require that the basis of accounting be supplemented with financial statements in cash, the accrual basis is used in operational reports to show receipts that have been recognized even though the right to obtain money has not been fulfilled and the cash has not been deposited into the State/Regional General Cash Account or by an agency. reporter.

Historical Value (Historical Cost)

Assets with historical value are assets that are valued based on the sum of the cash outflows plus the corresponding cash inflows.

Upon purchase, the asset may be recorded at fair value, which is another option. Historical values are more reliable than other valuations because they are more objective and can be easily confirmed.

Standard Accounting Consistency


Government budgets permit the use of cash-based revenue available for a given accounting period for a variety of purposes. Usually used to pay off debts and make purchases throughout the period.

LRA (Budget Realization Report) is a report that must be prepared, so cash-based income must be recognized after being allowed through the budget and after increasing or decreasing cash.

Substance Outperforms Formal Forms (Substance Over Form)

This concept is information designed to fairly describe transactions and other events that must be provided. Therefore, all forms must be documented and presented in accordance with the content and economic reality, and not just the aspect of formality.

If the contents of the transaction are inconsistent or different from the elements of formality, it must be stated explicitly in the notes to the financial statements.

Periodicity (Periodicity)

In order to assess the company's performance and determine the position of its resources, the reporting entity's accounting operations and financial reporting must be separated into several reporting periods.

The most common time frame is one year, but there are also times when monthly, quarterly, and semester time frames are required.


Reporting entities may be consistent by applying the same accounting approach to identical events on a period-to-period basis.

This situation does not indicate that there should be no change from one accounting technique to another, but the accounting methods used may change with conditions.

The new approach must be able to convey information better than the previous method. The notes to the financial statements explain what happened when these methods were changed and how they were used.

Government Accounting Base

Full Disclosure

Financial reports must provide users with all the necessary information. Information should also be provided on the front page of the financial statements or in the notes to the financial statements.

Fair Presentation

Within a fair presentation framework, competent judgment is essential for preparers of financial statements and financial management when faced with uncertainty about certain events and situations.

The nature of uncertainty is disclosed in the preparation of financial statements using competent judgment. Such reasonable consideration may include an element of caution so that in the financial statements assets are not overstated and liabilities are not understated.


Below we have summarized some frequently asked questions about government accounting standards, as follows:

Who Prepares the PSAP?

PSAP change plans are prepared by KSAP in accordance with the applicable mechanism in the preparation of SAP.


Principle accountancy used to prepare and display various forms of government financial reports. Government accounting standards are meant to be used by state governments, in this case, the Indonesian government.

The main reports, according to SAP, include: Actual Expense Report, balance sheet and Cash Flow Report. Keeping good accounting records will facilitate processing and reporting to the government.

Governments tend to have more confidence in businesses that use accounting systems that are in good standing with the public. Government accounting standards aim to increase the accountability and dependability of government financial management.

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