Should Business and Non-Business Accounting Be Different? A Comparative Perspective Applied to the New French Governmental Accounting Standards

International Journal of Public Administration (IJPA), Volume 35, Issue 9, July 2012, pages 603-619

12th Biennial CIGAR Conference Paper, University of Modena, Italy, May 28-29, 2009

EGPA Annual Conference, Rotterdam, September 2008

40 Pages Posted: 15 Jun 2009 Last revised: 3 Aug 2012

Yuri Biondi

French National Center for Scientific Research (CNRS)

Date Written: October 4, 2011

Abstract

A conceptual framework of accounting for the economics of non-business entities is developed and applied to the new French "accounting constitution" of governmental accounting. The concept of non-business entity is used to investigate the nature and role of non lucrative organizations within the economic system and their specific economic and monetary process. This theoretical perspective compares business and non-business accounting representations. Accordingly, concerning business entities, three different accounting models of accruals are addressed: the wealth-basis (static), the cash-basis, and the flow-basis (dynamic). Whilst the wealth-basis refers to current (fair) values and results to be at odds with the specificities of the non-business economics, a dynamic accounting model of the accruals basis is retained and adapted to these specificities. This dynamic accounting model is then applied to a conceptual assessment of the new French accounting standards set. With the enactment of the General Law of Finances of 2001 (LOLF, 2001), the French Government introduced a new set of accounting standards shaped by an explicit conceptual framework. This legislation retains for governmental accounting the logic of financial reporting that had been in effect for business enterprises, but also addresses the "specificities" of accounting for public sector entities. According to our analysis, the concepts of "produit" (revenue) and "actif" (asset), and some specific standards create an ambiguity between the static and the dynamic model. Our conceptual framework may be applied further to the analysis of other accounting standards sets such as the International Public Sector Accounting Standards (IPSAS).

Keywords: public accountability, accruals and cash accounting, non-business accounting and economics, governmental accounting theory and standards, France, nature and role of the non business entity

JEL Classification: D73, E62, H61, M40

Suggested Citation

Biondi, Yuri, Should Business and Non-Business Accounting Be Different? A Comparative Perspective Applied to the New French Governmental Accounting Standards (October 4, 2011). International Journal of Public Administration (IJPA), Volume 35, Issue 9, July 2012, pages 603-619; 12th Biennial CIGAR Conference Paper, University of Modena, Italy, May 28-29, 2009; EGPA Annual Conference, Rotterdam, September 2008. Available at SSRN: https://ssrn.com/abstract=1414751 or http://dx.doi.org/10.2139/ssrn.1414751

Yuri Biondi (Contact Author)

French National Center for Scientific Research (CNRS) ( email )

IRISSO - University Paris Dauphine PSL
Place Marechal Lattre Tassigny
75016 Paris
France

HOME PAGE: http://yuri.biondi.free.fr/

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