In government-wide financial statements, which basis of accounting and measurement focus is used?

The government-wide financial statements use the accrual basis of accounting in combination with an economic resources measurement focus. This approach is designed to provide a comprehensive view of a government's financial position and operating results.

Using the accrual basis means that transactions are recorded when they occur, regardless of when cash transactions happen. This allows for a more accurate representation of a government's financial status, incorporating all assets and liabilities. Such inclusiveness captures long-term commitments and obligations as they arise, offering greater insights into the overall economic condition of the government.

The economic resources measurement focus extends beyond just current assets and liabilities. It encompasses the full range of a government's financial activities, including long-term assets and liabilities, providing a holistic view of its financial health. This focus is crucial for users of the financial statements, as it reflects the government’s ability to meet its obligations over both the short and long term.

In this framework, financial statements accurately communicate the overall economic performance of the government, allowing stakeholders to make informed decisions based on the complete financial picture rather than a limited snapshot.