The Balanced Budget and Interperiod Equity: Implications for Financial Reporting

Public Fund Digest, Fall 1997, 8(2): 37-54

Posted: 3 Sep 2014

See all articles by K. K. Raman

K. K. Raman

The University of Texas at San Antonio

Date Written: 1997

Abstract

A critical issue in international financial management is that of "balancing the government's books" (The Economist 1994, p. 73). Since governmental commitments to maintaining or improving citizens' well-being are subject to reĀ­source constraints, the Governmental Accounting Standards Board (which is the accounting standard setting body for state and local governments in the U.S.) has noted the need for governments to "live within their means" and has espoused the notion of interperiod equity (IPE) as a performance measure (GASB 1987, para 59, 61). The objective of this paper is to increase the common understanding of concepts such as the balanced budget, intergenerational equity, and the relevance of IPE information, and the notion of a targeted level of service capacity as the appropriate capital maintenance concept for governments.

Keywords: Governmental financial reporting, balanced budget, interperiod equity

JEL Classification: G18, L11, L15, L51, L80, M40, M41, M42, M48

Suggested Citation

Raman, K. K., The Balanced Budget and Interperiod Equity: Implications for Financial Reporting (1997). Public Fund Digest, Fall 1997, 8(2): 37-54. Available at SSRN: https://ssrn.com/abstract=2490551

K. K. Raman (Contact Author)

The University of Texas at San Antonio ( email )

One UTSA Circle
San Antonio, TX 78249
United States
210-458-8749 (Phone)

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