A Teaching Topic in Public Financial Management
Financial Statements and Accounting Concepts
This foundational topic covers the core concepts and best-practices involved in public sector accounting (including the General Accepted Accounting Principles, or GAAP) and key financial statements, including balance sheets, income statements, and statements of financial position. The topic also includes discussion of financial management, internal and external reporting, and the evolution of accounting practices in the public sector.
Topic Learning Outcome: Upon mastering this topic, students will be able to read, understand and analyze key financial statements and will be familiar with basic accounting concepts.
Core Concepts associated with this Topic: Accounting, Accounting Controls, Accrual Basis of Accounting, Amortization, Assets, Balance Sheet, Basic Financial Statements, Double-Entry Accounting, Financial Management, Financial Reporting, Generally Accepted Accounting Principles (GAAP), Statement of Financial Position
Graham, Andrew. Canadian Public Sector Financial Management. Kingston: McGill-Queen’s University Press, 2014 (2nd Edition) or 2007 (1st Edition). Chs. 2, 3, and 4.
5th edition, "Chapter 1 – The Government and Not-for-Profit Environment" pages 1-23
Granof and Khumawala, Government and Nonprofit Accounting
Warren Ruppel, Not-for-Profit Accounting Made Easy, "Chapter 2 – Basic Financial Statements of a Not-for- Profit Organization" pages 43-63
Sample Assessment Questions:
1.) What does the acronym GAAP stand for, and why is it important for public management practitioners to be familiar with GAAP?
2.) Define the term “double-entry accounting”
3.) What is full accrual accounting? Why did full accrual accounting become a generally accepted accounting principle for federal and provincial governments in 2005? (i.e. what are some of the advantages of full accrual accounting?).
4.) What information is contained in a statement of financial position?
Page created by Matthew Seddon; updated by Katherine Valiquette and Ben Eisen on 20 March 2015.