The Research On Accounting Problems Of Government Contingent Liability

Fiscal risk is what government must affront. Fiscal risk is analyzed from the perspective of assets and liabilities in this paper. Government liabilities, especially government contingent liabilities (GCL), are the root cause of fiscal risk. Government liability risk can not be avoided. The key is to control. Government liability risk is a systematic project, and its basic objective is to achieve by the information of government liabilities, of which government managements and policy-makers timely access truthfulness and completeness. Government accounting information is the basis of the most important to control government liability risk.GCL relating to government sustainable development and financial transparency must be reasonably measured and disclosed in order to guard against and defuse fiscal risk. This paper intends to study accounting problems of GCL based on government accounting of accrual basis. On one hand, it is important to analyze the reason and mechanism of the GCL from the perspective of public finance and macro-economic, in order to provide a theory framework to control government liability risk. On the other hand, it is a key to recognize,measure and report GCL to provide complete and timely information to control government liabilities. The accrual basis is a natural choice to achieve the objective of government liability control, and it needs present value to measure GCL. The author suggests that establishing GCL sheet and full disclosing GCL to provide decision-make information and government financial condition information.The paper draws on the results of international research on accounting for GCL. Its innovation is to research how to account for GCL based on government accounting of accrual basis, which is defined in public finance. Using present value to measure GCL and suggesting in establishing GCL sheet are the innovations.