On financial risk management perspective on the general budget accounting reform

[Abstract] government debt in the accounting information for financial risk management plays a key role, however, the total budget for the current financial position of the accounting system as the main cause of the lack of accounting information are not uniform, causing subjects to set a single accounting information is not clear, and payment basis of accounting liabilities caused by incomplete information, which will inevitably affect the financial risk management needs of the quantity and quality of information, so the article on financial risk management perspective, the total budget proposed to enhance the uniformity of accounting, the accounting of government debt clear content, combined with the gradual introduction of the "accrual" and other measures to the general budget accounting system reform proposals and measures.

[Keywords:] of the total budget accounting system, financial risk management; government debt accrual

First, financial risk management and the general budget accounting according to the World Bank and International Monetary Fund's definition of financial risk that future government funding facing the pressure that government debt, including government borrowing and spending, according to the caliber of the World Bank, Government liabilities, there are four characteristics: First, the direct liability refers to the condition occurs in any financial liabilities, it has a necessity, not dependent on any specific incident, the second is a contingent liability that the State finances may face some random debt incurred, the three dominant liabilities, by state law or the contract clearly states the government must repay the debt by the government, four are hidden liabilities, that is, those who are not by law or government contracts to be provided, but because of government pressure or public expectations, the Government must play a moral obligation or expected responsibility [1] Government debt can have more than two features, it can be divided into direct explicit liabilities, direct implicit liabilities, or explicit liabilities, or implicit four types of liabilities.

According to the Ministry of Finance data show that: the end of 2008, China's balance of 5.33 trillion yuan treasury bonds [2], in 2009 the government deficit ratio will be within 3% of the issued 558.1 billion yuan treasury bonds [3] According to EU standards, national debt safety standards of the deficit to GDP ratio should not exceed 3% of government debt to GDP ratio should not exceed 60% of the .2008 rate of 79.57 percent of China's comprehensive liability [3], although in 2005 84% of the level has dropped, but still higher than international safety line in recent years, increased urbanization and construction Redu case, the size of the central and local government debt also will be gradually increased if coupled with the need to pay immediately all pension and many other hidden liabilities, a lower level of estimated fiscal year 2010, the average size of 7 trillion debt balance of these huge debts if not handled properly, could bring huge financial risk.

Government financial risk management, which is borne by the need for a variety of financial risk identification, evaluation and implementation of effective management to take the right decisions so that the risk of losses to a minimum, while the financial risk identification, assessment basis dependent on government Accounting provides timely, objective and reflect the Government's financial, government debt is mainly in the accounting information only to provide correct and timely accounting information government debt, to remind the government and would pay attention to financial risk, in order to make a variety of risks to be in government decision-making estimates and warning, to take effective measures to reduce losses. With our budget accounting reforms, initially formed in 1998 to implement the <<general budget accounting system>> and the implementation of 2001 <<<general budget accounting system > Interim Supplementary Provisions>> (hereinafter referred to as the 'general budget accounting system, "as the main accounting system related to government debt, fiscal account accounting system, financial management reform and the related accounting system, accounting system and other special funds to supplement the system system. the general budget accounting system determines the dominant position of financial risk management, it should become an indispensable source of information and management tools so, from the perspective of financial risk management, general budget accounting system reform is useful to explore and study significance, but also very necessary.

Second, the current general budget accounting system deficiencies on the impact of financial risk management (a) the dominant position of general budget accounting system caused by the lack of uniform accounting content is not reflected in government debt in the accounting information, the total budget accounting system play a leading role, should guide Other related debt accounting system, which means the financial statements should reflect the total budget accounting system, budgetary accounting has to be content and other debt help debt risk management controls related to accounting content. But the general budget accounting system does not effectively reflect the status command. Specifically in the following two aspects: First, "loans from international financial lending accounting system>> is relatively independent of the general budget accounting system, though <<international financial organizations credit lending accounting system "of financial institutions lending department from the" loan agreement into effect, "annually to the project implementation process" withdrawal reimbursement "when there is debt, debt, loans until the restitution claims, the disappearance of the government debt The full accounting of debt, but only to the general budget accounting should take some of the budget through additional lending department "sinking fund" indirectly included in the "budget expenditures", the return of the loan when the financial settlement funds through two reflect the number of debt repayment [4] Government debt as an important component of government debt for financial risk management have great significance, but the operation of debt capital is not in the general budget accounting to reflect specific, so not conducive to government debt The overall risk to master and control.

Second <<social insurance fund accounting system>> independent of the general budget accounting system outside the Social Insurance Fund as a governmental action, its financial health related to the government's future fiscal burden of social insurance financing in China is not ample, a very heavy burden of social insurance expenditures in the case of social security funds to run the master of accounting information for the Government's financial risk management is particularly important, but in general budget accounting system simply reflects the allocation of the Fund's fiscal year spending does not reflect the overall social insurance fund operation. In this separate accounting system, accounting for the content of non-uniform resulting in social insurance funds operating information not included in the general budget accounting is not conducive to government social insurance funds on the overall state of knowledge, is not conducive to the social security regulation and financial risk prevention.

(B) Liabilities subject to set the contents of a single lead to government debt reflects the lack of clarity in the current general budget accounting system, the liability account only the "Borrowed Money", "to borrow finance working capital" and "temporary deposits", "contacts with superiors" and small number of subjects. Among them, the accounting system clearly provides that the Central government and local governments in accordance with national law, the State Council and the existing mechanisms for debt borrowing liabilities through the "Borrowed Money" accounting subjects, but also provides a basis having the central budget of the National People's Congress approved the amount of borrowing domestic and foreign debt borrowing, but the "Borrowed Money" does not specify domestic and foreign debt accounting content, not classified according to the length of loan period at the balance sheet only from the "Borrowed Money" project in the Government treasury bonds and changes, but also failed to classify the information presented and detailed, specific disclosure of accounting statements and this will inevitably affect the usefulness of the information provided is not conducive to reasonable arrangements for debt financing, we can not analyze the government's domestic debt and subordinated debt debt capacity, and no evaluation of short-term government debt and long-term debt risk.

In addition, "higher-level contacts with the" financial accounting subjects between the upper and lower levels of funds due to the formation of bond-lending credit and debt, I believe that the defects. Bond-lending funds, the State Council for the expansion of effective demand, the issuance of bonds in 1998 as part of transfer loans to local governments use the funds, while "higher-level contacts with the" up and down the financial accounting of the settlement funds to be used by content, budget funds are not paid for accounting of funds. bond-lending funds in the general budget accounting is not financial statements are clearly reflected, bond-lending statement users can not get the size and changes in capital movements, and no gain on financial risk management, accounting information helpful.

(C) the cash basis of accounting-based government debt lead to incomplete <<general budget accounting system>> requirements: General

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Budget on a cash basis of accounting-based, although the <<<general budget accounting system> Interim supplementary provisions "clearly can be used on the accrual basis of individual items, but other obligations have adopted the cash basis of accounting . cash basis only part of the actual payment of cash accounting, and accounting for the current period has already occurred, but not yet paid the debt with cash accounting is powerless. This has led to the current accounting of the general budget accounting is only a "direct explicit liabilities", and for some of the important role of "hidden, or of the debt" is not accounting, these liabilities include guarantees of foreign debt, social security funds gap, bad debts and other financial institutions. Data show that China's 2006 19.6975 trillion yuan of government debt, only in the financial statements reflect the direct explicit liabilities of 3.7866 trillion yuan, about 81% of government implicit, liabilities can not be reflected in [3], which shows that the existing government accounting result of direct government implicit liabilities and contingent liabilities and hidden risks are substantial accumulation, will result in huge financial losses the future, to finance sustainable development has brought very serious impact.

In addition, the cash basis although a clear benefit managers cash flow, but cash basis is usually the "bad result after the occurrence" was measured and confirmed the existence of accounting information is often "lag" and "narrow", managers can not be timely get information on the financial risk that will be produced early warning and prevention did not play, this time accounting for financial risk management function should have lost the information.

For example, a local government should in the first 12 months of the fiscal year allocated an amount of 200 million of wages, but this year will produce 2 million deficit, thus violating the law on the non-occurrence of the current budget deficit of the provisions of this end will be allocated this year the wages should be delayed until next year appropriation, there would be this year's hidden debt, deficit avoided, the financial risk will therefore be underestimated.

In short, the government debt accounting information are not uniform, unclear, incomplete, inevitably lead to the current accounting reflects the general budget of the government debt is too small amount of information, information quality, and could not be a financial risk management to provide timely, objective information, Therefore, the Government Accounting "liabilities" of the reforms.

Third, financial risk management perspective based on the general budget accounting reform proposals (a) a clear command of the general budget accounting system, the status of the general budget reform, we must first clear the general budget accounting system and the <<-lending loans from international financial accounting system >>,<< social insurance fund accounting system>> and other relations between the accounting system. the general budget accounting and <<loans from international financial lending >>,<< social insurance fund accounting system accounting system>> belong to the government's macro-accounting, the latter two only for a particular aspect of government funds for a partial accounting and supervision, while the general budget accounting system, comprehensive, and global budgets of other government's macro-accounting can not be compared.

In order to reflect the general government debt situation, it is necessary to the other government's macro-accounting information to reflect the totality of the debt reflected in the general budget accounting statements, of course, the general budget accounting and not a substitute for other macro accounting for the special needs of accounting.

It is therefore recommended in the general budget accounting system in additional lending of international financial organizations and social insurance funds in the accounts, and in the general budget to be specifically reflected in the accounting and presentation. On bond lending and loans from international financial organizations important information, such as the return date of the debt, external borrowing period, the total budget exchange rate and other financial statements in the notes, or other form of disclosure.

This will have been accounted for, but not included in the general budget accounting statements reflect the balance of information to be unified in order to facilitate the reporting user access to comprehensive reports with a government debt information can also be obtained within the scope of the financial accounting The total amount of debt, help the government identify the debt as soon as possible risks, take appropriate measures to guard against.

(B) clear the content of government debt accounting

The total budget accounting system to reflect the ideological position of command in conjunction with the reform of fiscal revenue and expenditure classification, this paper accounts for the total budget set for the following reform proposals: First, it should be further divided into "Borrowed Money" accounting content, long-term sub-loans will be Borrowed Money and short-term loans accounted for, according to division of domestic debt and foreign debt.

Suggested that "Borrowed Money" to set "long-term Borrowed Money" and "short-term Borrowed Money," two subjects, and in every subject under the sub-national debt and foreign debt accounting details. Elimination of domestic on-lending funds in the "contacts with superiors" and "lower-level contacts with" approach, lending funds to domestic long-term or short-term debt points included in the "long-term Qualified Borrowings - domestic lending" and "short-term Qualified Borrowings - domestic lending" accounting subjects, as well, can the international financial Loan debt by over-lending organization practice as reflected in a breakdown of foreign lending. to reflect the transfer of loan funds to the lending, but also an additional asset class subjects' sub-loan ", reflecting the domestic and foreign lending money paid claims accounting.

Second, further division of the total budget accounting income and expenditure accounting class content, set up a "debt budget revenues" and "debt-budget expenditure," subject, reflecting the government to separate domestic and foreign borrowing, income and expenses when debt, set up a "Social Security Fund income "and" social security fund expenditure "subjects, reflecting the government to raise the required revenues and social security funds allocated by the provisions of the Social Security Fund's total expenditure.

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Finally, the clarity of the net assets of class subjects, the introduction of "social security fund balances" and "Government Loan Fund", "government compensation fund loans" subject. "Balance of social security funds" break even after accounting for social security net, by the end of the year " Social Security Fund's income, "" social security fund expenditure "and other related subjects in the social security fund to balance the number of transfers," the Government Loan Fund "," Government subordinated loans fund "accounting is the repayment of government loans and government when balance of funds.

In short, the creation of special accounts to reflect the government's debt, debt can be more specific accounting content, clarity, help clear debt to reflect the information will help the government in the financial statements from the general budget of overall debt risk control information, which is more convenient to manage the control and prevention of debt.

(C) the gradual implementation of accrual

The introduction of accrual financial risk for the control of important, but I believe that at this stage does not require the implementation of accrual basis accounting for all government debt, according to China's actual situation and should be combined with the previous set of subjects, differentiated, progressive introduction of accrual. specifically in the following areas: (1) lending funds for domestic and foreign direct explicit liabilities, consider the implementation of the accrual basis and cash basis double accounting practices. Administration management perspective based on the one hand, the total budget accounting to be able to provide timely information on risk control debt, on the other hand, do not want to because the accrual and the actual expenditure incurred is not recorded in the range of expenditures, government The rapid increase in spending has caused public misunderstanding and anxiety, so consider using the accrual and cash basis of accounting-based approach to two-for example, borrow or repay the loan, the cash basis of accounting based on debt income or expense recognition debit "treasury deposits", credited to "debt budget income" or debit "debt budget expenditure," credits "treasury deposits," while using the accrual basis to confirm the increase or decrease to meet the debt, borrowing debt debit "Government debt fund," credited to "long-term Borrowed Money" or "short-term Borrowed Money" subjects, the return of debt to do the opposite entries. Government will lend money on the one hand the cash basis of accounting, debit "general budget expenditures," credits "treasury deposits" and the other to accrual, debit "transfer credit" credit " government loan fund. "

You can also consider increasing the cash basis of accounting basis because not included in the liabilities of accounting content, such as "wages payable", "accounts payable", "interest payable" and other similar subjects such Borrowed Money, and with reference to accrual and cash basis of accounting to account for dual-based approach.

(2) directly to social insurance funds and other hidden liabilities, consider the nature of the business categories to choose from according to the accrual basis or cash basis accounting. The social insurance fund into pension funds, insurance funds and unemployment insurance fund. Pension As a result part of the accumulated insurance funds model, a considerable balance to invest in operations, so for normal use of cash basis accounting, year-end accrual adjustment. The medical insurance fund and the unemployment insurance fund, because the remaining fund small, less the amount of investment operations, should adopt the cash basis of accounting, in order to facilitate cost savings and improve efficiency.

Select a different basis of accounting will be reflected in the total budget insurance fund accounting, can be combined with the previous set of subjects. Treasury transferred to the financial sector received the usual all social security funds based on a cash basis of accounting, debit, "Treasury deposits", credited to "social security fund income" to pay the fund, the debit "social security fund expenditure" , credited to "other financial savings - Social Security deposits." year-end pension fund income and then adjusted to an accrual based amount, and finally the balance of all Social Security funds into "social security fund balances," and opened the books early in the accumulation of several columns, reflecting the accumulation of social security funds over the years.

(3) or explicit liability for the use of accrual accounting. This part of the explicit liabilities mainly represent or guarantee and compensation, executive compensation matters, pending litigation, non-performing assets of state-owned commercial banks, bad debts and other quantifiable contingent liabilities. liabilities can be set to 'expected liability' accounting subjects [5], measured from the following three aspects, namely sub-projects to quantify the major contingent liabilities, of which the best estimate of the recognition and expected to receive compensation of corporate accounting standards deal with trying to reference the <<or a matter of>> criteria for the relevant provisions, the second is based on the accounting of government in this matter or may have a variety of financial risks are expected to form the total, three further accounting for contingent liabilities is expected to form in the amount of direct government debt into the real part.

In addition, the general budget accounting should also be some other important or hidden liabilities, the disclosure of information to expand the amount of information government debt, such as the existence of the reporting date but not recognized as a liability of the capital expenditure commitments, the government disaster relief and so on.

Of course, the government debt includes many things, but in view of measurement difficulties, the disclosure of the cost increase, information needs and the limited extent of the wishes of government information disclosure level considerations, it is impossible, nor need they are totally reflected in statements.

[References]

[1] Ma Financial risk management: new ideas and international experience [M]. Beijing: China Financial and Economic Publishing House, 2003 [2] Ministry of Finance People's Republic of .2008 in the first half Debt Management Report [EB / OL] . (2008-10-13) [2010-1-10]. http://gks.mof.gov.cn/guokusi/zhengfuxinxi/gongzuodongtai/200810/t20081013_81645.html. [3] Wei Fengchun In 2009 the government is safe issued 558.1 billion national debt [EB / OL] [2010-11-12]. http://content.caixun.com/NE/01/3l/NE013laq.shtm. [4] Ministry of Finance Accounting Division Government of accounting Research [ M]. Dalian: Dongbei University Press, 2005. [5] Bi, filled, Yang Chengwen. implicit debt under the Government Accounting Reform of the [J]. Audit and Economic Research, 2007, (5) :70-72 .

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