Cameral accounting and cash flow reporting: some implications for use of the direct or indirect method

Abstract

The most thoroughly debated format issue in designing a cash flow statement for a business enterprise concerns use ofthe direct or indirectmethod when reporting cash from operating activities. The article argues that the reason why we cannot solve this dilemma of using the direct or indirect method is related to the fact that our discussion is limited to using the axiom of double-entry bookkeeping within commercial accounting. In this article, however, the discussion of whether to use the direct or indirect method is not limited to commercial double-entry bookkeeping; it is also based upon another accounting framework, specifically designed to deal with cash transactions of governmental organizations: single-entry cameral accounting. The article argues that commercial accounting could learn from cameral accounting, separating cash from non-cash balance sheet changes, and directly prepare a cash flow statement from the single-entries of the cash transactions on the cash account, before they are entered into the double-entry bookkeeping system, to provide a performance result (revenues minus expenses) and related balance sheet information (assets, liabilities and equity). By applying this procedure, the direct method of preparing a cash flow statement becomes the natural method to use.

Governmental Accounting in Norway: A Discussion With Implications for International Development

“…The literature about cameral accounting is basically published in German (see particularly Walb, 1926; Johns, 1951; and Wysocki, 1965 and Mülhaupt, 1987). In later years, however, some English language articles referring to German cameral accounting have been published (see particularly, Oettle, 1990; Monsen, 2001, 2002, 2006a and 2007). Therefore, non‐German speaking readers interested in further derails about administrative and enterprise cameralistics, including numerical examples (see Monsen, 2002 and 2007), are referred to these English language references.…”

Historical Development of Local Governmental Accounting in Norway

“…As a result of this fact, cameral accounting is hardly known beyond the German‐speaking countries. Fortunately, however, there are a few articles published in English about cameral accounting, including, Monsen (2001b and 2002) and Oettle (1990). Of these, Monsen (2002) represents the most detailed introduction to and discussion about cameralist bookkeeping as it is carried out on the cameral account, by drawing strongly upon Johns (1951), Mülhaupt (1987), Walb (1926) and Wysocki (1965).…”

“…The point of departure for the considerations in this phase was the attempt not only to include immediate cash inflows and outflows, but also later cash inflows and outflows, or in other words, the total revenues and expenditures (Wysocki, 1965). The English term used by Oettle (1990) (also see Monsen, 2001b and 2002) when referring to this phase of cameral accounting, focusing on total revenues and expenditures, is current due accounting.…”

“…The concepts presented in Table 1 are previous English language translations of the German cameral accounting concepts (see Monsen, 2001b and 2002; and Oettle, 1990). The corresponding English language concepts of commercial accounting are given in brackets in the following text.…”

Autonomy and control of public bodies : legal and economic autonomy and parliamentary control on service provision by ZBOs

“…Some authors claim that such a matching process can also be fulfilled in a cash accounting system (e.g. Berens, Bücker & Finken, 1998;Günther & Schill, 2000;Monsen, 2001), but the public sector accounting mainstream is convinced that accruals accounting is preferable as can be concluded from the effort devoted to the IPSAS-project.…”