Public Sector Accounting and Budgeting

Public Sector Accounting and Budgeting

Importance and application of forward-looking information in the public sector and capital market

Document Type : Review Article

Authors
Kumars Biglar 1
Shoeyb Rostami 2
1 Accounting Group, Qazvin Branch, Islamic Azad University, Qazvin, Iran
2 Department of Accounting, Qazvin Branch, Islamic Azad University, Qazvin, Iran
Abstract
In the United States, there are three types of government: local, state, and federal; Local and state governments meet the criteria of the Governmental Accounting Standards Board (GASB), and in particular the topics in Statements 34 and 44, which include the Comprehensive Annual Financial Report (CAFR), and the federal government, according to the Federal Accounting Standards Advisory Board (FASAB) are used for financial reporting. The common goal of financial accounting and reporting methods in state and local governments has been to provide information on the performance of government agencies to users of financial statements. These governments want to provide these users with an overview of the financial condition of these institutions on specific dates and a retrospective view of the results of their operations over a period of time (usually one year). The purpose of this article is to describe the perspectives on forward-looking information. Also show users of government financial statements how they can use this type of information to better assess the current financial health of each government, as well as its ability to meet its obligations in the future. On the other hand, the use of this information in companies and the capital market is also important and studies have shown that the disclosure of forwardlooking information, on the one hand reduces volatility in corporate stock returns and on the other hand is related to corporate accounting risk. 
Keywords
Forward-looking information
Government financial statements
GASB
Capital market
Disclosure of information

Subjects

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Public Sector Accounting and Budgeting
Volume 1, Issue 1
September 2020
Pages 1-8

  • Receive Date 14 October 2020
  • Revise Date 29 October 2020
  • Accept Date 06 November 2020