Study On The Capital Construction Accounting In Public Institutions Into Accounting For Public Institutions

The ongoing reform of accounting system for the public institutions has been a hot issue recent years. The capital construction accounting, as an important but non-recurring business transaction, has always been a difficult problem in accounting. The Ministry of Finance People's Republic of China tried to reform but failed due to the complexity, so this problem do need to be solved both by theorists and practitioners. This paper tried to do some research on that.Both the literature research and field research were adopted in this paper. By searching, reading, collecting and collating a lot of literature, the relevant financial accounting theories as well as the history of the capital construction accounting system and the researches about it were clearly presented. The real and concrete reality were grasped through interviews with 13 experts who had been undertaking the management of construction accounting in public institutions from the China Agricultural Engineering Consulting Center, the Chinese Academy of Agricultural Sciences, etc.Based on the financial accounting theory, this paper believed that merging the capital construction accounting system into the whole accounting system in public institutions was a fundamental and understandable way of solving problems in the long term, technically feasible in both theory and practice, which was concluded by analyzing the necessity of the merging from financial accounting objectives, as well as the domestic situation and the problems of the current accounting. Since the accounting elements are crucial for the accounting theory, merging the accounting elements in both accounting systems should be the first thing to do when intergrading the two accounting systems. From the perspective of both static and dynamic, this paper believes the source of funds should be transformed into liabilities, net assets and incomes, while the application of funds should be converted to assets and expenditures. According to the accounting elements cohesion, the accounting items which are unnecessary or inconsistent with the existing accounting system for the public institution should be removed, and the accounting items should be merged into the existing accounting items if they are same or similar. Furthermore, according to the business transaction for capital construction, we proposed 10 new accounting items under the direction of financial accounting theory, drawing on both the existing research and practice. After the conversion and cohesion, 2 accounting elements and 52 accounting items for capital construction would be replaced by 5 accounting elements and 39 accounting items. Then the paper gives some examples of accounting entries. In the end of the paper, some suggestions for the improvement of financial report were proposed.The innovation of this paper was that a set of accounting method was proposed according to the accounting elements cohesion, which would be more systematic and complete for the capital construction accounting in public institutions into accounting for public institutions. What's more, a subject setting in favor of the combination of physical management and value management were adopted, taking into account the difference of subject setting in the short term and long term.