Part 1: Significance of Government Accounting

CHAPTER 1.
Understanding Accrual-Based Government Accounting
Section 1. Significance of Government Accounting
1.
Concept and Characteristics of Government Accounting
2.
Purpose of government accounting
3.
Users of government accounting
4.
Government Accounting System
Section 2 Current Status of Government Accounting
1.
Budget accounting and expenditure accounting
2.
Financial Accounting: Double-entry Bookkeeping
3.
financial statements
Section 3 Double-entry bookkeeping government accounting
1.
Fundamentals of Accounting
2.
The accounting cycle
3.
financial statements
4.
Budget accounting and financial accounting

CHAPTER 2.
The concept of budget and budget accounting
Section 1. Significance of the Budget
1.
The concept of budget
2.
Functions of the budget
3.
Budget principles
4.
Classification by budget purpose
5.
Classification according to budget establishment process
6.
Current budget and capital budget
Section 2 Composition of the Budget
1.
General Budget Principles
2.
Revenue and expenditure budget
3.
Continued rain
4.
Specified carryover expenses
5.
Treasury debt burden act
Section 3 Budget Preparation
1.
Central government budget preparation process
2.
Local government budget preparation process
Section 4 Budget Execution and Settlement
1.
Budget execution procedures
2.
Budget allocation
3.
A system for flexibility in budget execution
4.
Settlement

Part II National Accounting

CHAPTER 3.
National Accounting Legal System and Scope
Section 1. National Accounting Legal System
1.
Structure and background of enactment of national accounting-related laws
2.
Key contents of the National Accounting Act
3.
Composition and main contents of national accounting standards
Section 2 Scope of National Accounting
1.
National financial scope
2.
Scope according to the National Accounting Act

CHAPTER 4.
Balance sheet
Section 1. Significance and basic elements of the financial statements
1.
Significance of the Balance Sheet
2.
Basic elements of a balance sheet
3.
Composition of the financial statements
Section 2 Accounting for Assets and Liabilities
1.
Accounting subject system
2.
Asset accounting
3.
Debt accounting

CHAPTER 5.
Financial statement
Section 1. Significance and basic elements of the financial management statement
1.
The significance of the financial management statement
2.
Basic elements of a financial statement
3.
Structure of the financial statement
4.
Recognition of revenue and expenses
Section 2 Accounting for Revenues and Expenses
1.
Exchange profits
2.
Other non-exchange income, etc.
3.
expense

CHAPTER 6.
Statement of changes in net assets, statement of cash flows, and statement of national tax collection activities
Section 1 Statement of Changes in Net Assets
1.
The significance of the statement of changes in net assets
2.
Structure and Components of the Statement of Changes in Net Assets
3.
Calculation and accounting treatment of items in the statement of changes in net assets
Section 2 Cash Flow Statement
1.
The significance of the cash flow statement
2.
Structure and Contents of the Cash Flow Statement
Section 3 National Tax Collection Activity Table
1.
The significance of the national tax collection activity table
2.
Structure and contents of the national tax collection activity table
3.
Accounting treatment of national tax collection activity sheet
4.
Disposal
5.
etc

CHAPTER 7.
National Treasury Accounting and Fund Accounting
Section 1 National Treasury Accounting
1.
The significance of national treasury accounting
2.
Accounting and financial statement presentation of national treasury funds
3.
Accounting for national treasury funds
4.
Presentation of national treasury financial statements according to national treasury accounting
Section 2 Fund Accounting
1.
Significance and accounting treatment of appearance fees and contributions
2.
The meaning and accounting treatment of reserves and accrued funds

CHAPTER 8.
National Accounting Settlement and Budget Accounting Linkage
Section 1 National Accounts Settlement
1.
The significance of national accounting settlement
2.
Financial Accounting Settlement
Section 2 Linkage between National Accounting Budget and Accounting
1.
The significance of linking budget and accounting
2.
Types of linkages between budget and accounting
3.
Budget and Accounting Linkage Plan

Part III Local Government Accounting

CHAPTER 9.
Legal system and scope of local government accounting
Section 1 Local Government Accounting-Related Laws
Section 2 Local Government Financial Accounting Laws
1.
Local Finance Act and Local Accounting Act
2.
Enforcement Decree of the Local Finance Act and Enforcement Decree of the Local Accounting Act
3.
Local accounting standards
4.
Local Government Double-Entry Bookkeeping and Financial Accounting Operation Regulations

CHAPTER 10.
Balance sheet
Section 1 Assets
1.
Concept and recognition of assets
2.
Classification of assets
3.
Major asset classes
4.
Acquisition of assets
5.
Disposition of assets
6.
Valuation of assets
Section 2 Debt
1.
The concept and perception of debt
2.
Classification of Debt
3.
Major debt items
4.
Evaluation of municipal bonds
5.
Evaluation of long-term debt, etc.
6.
contingent liabilities
Section 3 Net Assets
1.
The concept of net worth
2.
Classification of net assets

CHAPTER 11.
Financial statement
Section 1. Concept and Recognition of Profit
1.
The concept of profit
2.
Revenue recognition criteria
Section 2 Components of the Financial Management Statement
Section 3: Major income in the financial management statement by nature
1.
Self-financing revenue
2.
intergovernmental transfer revenue
3.
Other income
Section 4: Concept, Recognition, and Classification of Costs
1.
The concept of cost
2.
Cost recognition criteria
3.
Classification of costs
Section 5. Major expenses in the financial management statement by nature
1.
personnel expenses
2.
Operating expenses
3.
intergovernmental transfer costs
4.
Private transfer costs
Section 6 Daily Expenses
Section 7 Cost Accounting
1.
Purpose and general principles of cost accounting
2.
Direct costs and indirect costs
3.
Utilization and management of cost information

CHAPTER 12.
Statement of Changes in Net Assets
Section 1 Increase and decrease in net assets
1.
Increase in net worth
2.
Decrease in net worth
Section 2 Accounting Changes and Error Corrections
1.
Accounting changes
2.
Error correction

CHAPTER 13.
Local government accounting settlement and budget accounting linkage
Section 1 Significance of Financial Accounting Settlement
1.
Concept of financial accounting settlement
2.
Relationship between financial accounting settlement and budget accounting settlement
3.
Schedule and procedures for financial accounting settlement
Section 2: Settlement Adjustment Report
1.
The significance of the settlement adjustment
2.
Accounting treatment of deferred items
3.
Accounting treatment of accrued items
4.
Accounting treatment of estimated items
5.
Other corrections
Section 3 Preparation of financial statements
1.
Consolidated financial reporting and elimination of internal transactions
2.
Preparation of financial statements

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To ensure a decent life for citizens, the state and local governments provide public services.
And those public services must be sustainable over generations, and the total amount of public services must remain stable or increase.
Therefore, government financial activities that manage public service resources must be carried out efficiently, performance-oriented, and transparently.
And government accounting should help produce and provide useful information about the content and performance of its financial activities.

Since the introduction of the accrual-based, double-entry bookkeeping system at the local government level in 2007 and at the national (central government) level in 2009, government accounting has been included in the multiple-choice accounting subject of the Certified Public Accountant exam since 2012, and it has established itself as a field with the creation of accounting positions in the civil service recruitment field, and has also shown some achievements, including reforming civil servant pensions.


In addition, the central government is recently expanding the accrual-based and double-entry bookkeeping accounting system used in the private sector by requiring the preparation of cash flow statements.
Despite this, calls for enhancing the role of government accounting, including increasing the usefulness of government accounting information, continue to be raised.

This book was written with the goal of providing basic knowledge on government accounting and fostering basic capabilities for practical application.
It is intended to be used as a textbook for students majoring in accounting, public administration, etc. at universities, and as a standard reference material for those working in the fields of finance and accounting.
Accordingly, national accounting and local government accounting are dealt with in an integrated manner, and the legal basis, accounting standards system, accounting processing methods, and financial statement preparation and analysis methods of each system are explained.


In addition, it is structured to ensure that learners have a balanced understanding of the theory and practice of government accounting, including settlement procedures and financial information disclosure systems.
Additionally, it reflects the contents of the government accounting system that was significantly revised in 2024.

This book is a continuation of the book (Double-Entry Bookkeeping Government Accounting) written by Professors Kim Kyung-ho, Jeon Jung-yeol, and Kim Hyeok, who played a first-generation role in introducing the accrual basis and double-entry bookkeeping system in government accounting.
I would like to take this opportunity to express my gratitude to the professors who allowed me to write this book.
I would also like to express my gratitude to Team Leader Jin Tae-ho of the National Accounting and Financial Statistics Center at the Korea Institute of Public Finance for providing various materials and advice on the 2024 government accounting revisions.

This book provides fundamental knowledge of government accounting and was written to help learners acquire the basic skills necessary for practical application.
We will explain the basic structure and institutional background of government accounting, along with the actual application process.

This book is unique in that it covers national accounting and local government accounting in an integrated manner.
We present the legal basis and accounting standards for each system, as well as accounting procedures based on accrual-based and double-entry bookkeeping.


It also specifically explains the nature and utilization of financial information produced by government accounting through financial statement preparation and analysis methods.
It is structured so that learners can understand both the theoretical framework and practical operational process of government accounting, including the settlement procedures and financial information disclosure system.

In particular, it reflects the contents of the government accounting system, which was significantly revised in 2024, to help you effectively understand the changed institutional environment.


This book serves as a foundational resource for understanding the structure and principles of government accounting from an academic perspective, and as a practical reference for responding to the changing institutional environment.
It can be used as a textbook for accounting and public administration majors at universities, and as a reference material for those working in the finance and accounting fields.