Research On Information Disclosure Of Government Liabilities

Since the outbreak of financial crisis and sovereign debt crisis, how to promote governmental accounting reform, develop related accounting standards, and improve government financial information disclosure have been the focus of governments, standards setters, and scholars around the world. In the process of governmental accounting system construction, debt risk is one of the main factors accelerating the pace of the government financial information disclosure reform. In order to provide complete and timely information of government liabilities while at the same time managing those liabilities to reduce related risk, it is imperative to develop a disclosure system which can effectively convey government accounting information. Faithful and reliable disclosed government liability information can help credit rating agencies provide government ratings, and therefore reduce government financing costs. Fully disclosed government liability information will also further enhance fiscal transparency, satisfy the information needs of different stakeholders, and alleviate the information asymmetry between government and public to help public supervise and evaluate the government public fiduciary duty.Based on the existing research and combined with the current situation of China, this paper includes the basic theories of government information disclosure, the latest policies, and newly released accounting standards of both China and abroad. This paper also delivers a case analysis of Beijing municipal government and the analysis of liability part in recent financial reports of United States federal government, government of city of Chicago, and New Zealand government. By exploring the present deficiencies in government liability information disclosure and discussing how to draw on the foreign experience, this paper provides an in-depth research and puts forward measures can be taken to optimize the disclosure. This paper includes six parts. The first part is the introduction, the second part is the theoretical analysis related to the government liability information disclosure, and the third part discusses the current situation of government liability information disclosure in China. The fourth part analyzes the existing problems in government liability information disclosure in China. The fifth part elaborates on the international practices of government liability information disclosure and enlightenment to China, and the sixth part puts forward optimization measures regarding the disclosure.The innovativeness of this paper lies in that it provides an in-depth research from the perspective of government liability information disclosure under the broader topic of government information disclosure. It also contains the latest development of both Chinese and international accounting standards of government liability, summarizes current rules and approaches for disclosing government liability in China, and introduces case analysis of Beijing municipal government, United States government and New Zealand government. The main conclusions are as follows. Problems in government liability information disclosure in China include:deficiencies existing in the current government information disclosure make it difficult to convey liability information faithfully, the government accounting system has not been established resulting in hidden risks embodied in local government liabilities, the liabilities arise from government responsibilities or policies have not been disclosed, policies governing local government liability and standards related to official survey need to be unified, a comprehensive system of government liability information disclosure has not been formed. Through the case analysis and international comparison, this paper highlights some foreign experiences that merit attention from the perspectives of defining the scope of government liability, disclosing format and notes, government bonds disclosure, pension liabilities, liabilities result from government guarantee, and contingent liabilities. In order to optimize the government liability information disclosure, it is necessary for China to introduce accrual basis to the account of government liability, design appropriate accounts, choose accounting measurement attributes, diversify disclosure platforms, increase public availability, conform to the principles of disclosure, develop governing rules and standards, coordinate reform of fiscal management system and disclosure, and improve the relevant supporting mechanisms to the information disclosure.