Disclosure of Non-Current Tangible Assets Information in Local Government Financial Statements: The Case of Lithuania

Abstract

The aim of the research is to examine and evaluate the accounting information disclosure quality of the non-current tangible assets in the financial statements of the municipalities of Lithuania and identify municipality characteristics having an impact on the accounting information disclosure quality. Although the question of Lithuania public sector accounting information disclosure quality has been relevant since the Public Sector Accounting and Financial Reporting Reform in 2010, this research is the first of its kind in Lithuania. Based on the legal and regulatory requirements and related scientific literature, the research model of the accounting information disclosure quality in the financial statements has been created. Using the content analysis of consolidated annual financial statements of Lithuanian municipalities (years 2013–2016), the disclosure quality index has been calculated, as well as the accounting information disclosure quality of the tangible assets has been evaluated and compared. The results show that the quality of accounting information disclosure of Lithuanian municipalities in 2013 was low (revealed 37.87% of the mandatory information), while in subsequent years, the disclosure of mandatory information increased (to 45.50% in 2016) and the quality of information disclosure became average. Multiple panel regression analysis revealed that specific factors such as size of the municipality, municipality debt-paying capacity, municipality tangible assets, and municipality revenue, have a statistically significant impact on the accounting information disclosure quality.

Analysis of potential factors of financial statement disclosure: Evidence from Indonesian local government

“…Liability is a condition where the government has a debt, the settlement of which is carried out in the future at the expense of a number of assets. This study uses indicators such as the ratio of liabilities to assets used by Kanapickiene and Staniuleniene (2019). Local own revenue is the revenue generated by the regional government as seen in the performance of regional autonomy in the decentralization context.…”

“…Cooke (1993) argues that organizations with a high dependency on debt tend to reveal more excessive information to reduce the cost of debt and to show ability to pay. According to Kanapickiene and Staniuleniene (2019), the level of quality of Revenue from local governments can be used as a tool to increase the amount of welfare they provide. Local revenue is intended to implement regional autonomy without the help from the central government in accordance with each region's capacity as an expression of decentralization (Aswar, 2019).…”

“…LGs), revenue (3% in 7 LGs), capital expenditures (14% in 34 LGs), operational expenditures (14% in 34 LGs), and other accounts were 10% in 26 LGs. Furthermore, BPK's investigation revealed that there were 12,117 findings with 7,398 findings, indicating that there was a problem with 6,259 non-compliances in the provisions of the statutory regulation totaling Rp.…”