Comparing Budget and Accounting Measures of the Federal Government's Fiscal Condition

摘要

The federal government issues two different reports of its fiscal performance: the budget and the Financial Report of the United States Government. Both contain useful information for policymakers, and taken together they provide a richer perspective than can be obtained from either report singly. But to make best use of the reports, it is important to understand their differences and the strengths and limitations of each. The federal budget largely measures cash flows in and out of the U.S. Treasury, and, for the most part, reports those cash flows in the year in which they occur. The financial report, by contrast, primarily uses an accrual basis of accounting to measure assets, liabilities, revenues, and expenses. The principal difference between cash and accrual accounting is the timing of recognition. An accrual system generally recognizes transactions when an economic event occurs rather than when the resulting cash flows take place.