Effective April 1, 2005, generally accepted accounting principles for Canada's federal, provincial and territorial governments require that their financial statements be prepared on a full accrual accounting basis. Cash accounting essentially reports cash transactions when received or paid. Consequently, financial statement items such as amounts owed to or by the government or other noncash items are not recorded. The opposite is full accrual, which recognizes transactions when they have been earned or incurred rather than when cash comes in or out. Because of its focus on recording the economic substance of incurred transactions rather than when cash came in or out, full accrual accounting provides more complete, accurate and consistent information, which was not provided by cash accounting. As such, full accrual accounting information assists governments in making better decisions and improved transparency.

Reforms
Financial reporting
GAAP