Manual 3 - Federal Accounting System Chapter 12. Financial Statements
Manual 3 - Federal Accounting System Chapter 12. Financial Statements
Manual 3 - Federal Accounting System Chapter 12. Financial Statements
The financial statements presented are intended to meet the needs of users who are not in a
position to demand reports tailored to meet their specific requirements. These users include
stakeholders such as members of the legislature, donors, lenders, tax payers and employees.
The objective of the financial statements is to provide information about the financial
position, performance and cash flows that is useful in making and evaluating decisions
about the sources, allocation and uses of financial resources and about how the activities
were financed. In addition, the financial reporting also provides users with information
about whether resources were used in accordance with the approved budget.
Transparency in government begins with full and fair disclosure of financial information.
The FGE uses the International Public Sector Accounting Standards (IPSAS) issued by the
Public Sector Section of the International Federation of Accountants as a basis for
establishing the financial statements.
The FGE accounting system can produce the following set of financial statements:
In addition to the above financial statements, the accounting system also produces detailed
revenue and expenditure schedules that provide detailed information and analysis of the
summary countrywide financial statements.
The remainder of this chapter describes the format of each financial statement.
GOVERNMENT OF ETHIOPIA
ASSETS (CURRENT)
Cash and cash equivalents 1 0 0
Receivables 2 0 0
Total Assets 0 0
LIABILITIES(CURRENT)
Current Liabilities - Payables 3 0 0
Total liabilities 0 0
Net Current
Assets/(Liabilities) 0 0
NET ASSETS/EQUITY
Accumulated surpluses/deficits 0 0
GOVERNMENT OF ETHIOPIA
Statement of Financial Performance
For the year ended 7 July 20X2
Ethiopian Birr '000
Notes 20X2 20X1
OPERATING ACTIVITIES
Operating Revenue
Tax revenues 4 0 0
Non-tax revenues 5 0 0
Subsidies 6 0 0
Municipality revenues 7 0 0
Other revenue 8 0 0
Total operating revenue 0 0
Operating Expenses
Subsidies 0 0
Personnel services 9 0 0
Goods and services 10 0 0
Fixed assets and construction 11 0 0
Other expenses 12 0 0
Total operating expenses 0 0
GOVERNMENT OF ETHIOPIA
Changes in accounting
policy/Fundamental errors 0
Restated balance 0
GOVERNMENT OF ETHIOPIA
Cash Flow Statement
For the year ended 7 July 20X2
Ethiopian Birr '000 20X2 20X1
1 CASH FLOW FROM OPERATING ACTIVITIES
Tax revenues 0 0
Non tax revenues 0 0
Other income 0 0
Miscellaneous income 0 0
Municipality revenues 0 0
Regional subsidy 0 0
Total Receipts - A 0 0
Personnel services 0 0
Goods and services 0 0
Finance charges 0 0
Subsidies 0 0
Other expenses 0 0
Total Payments - B 0 0
Non Cash Movements
Increase/(Decrease) in payables 0 0
Increase/(Decrease) in receivables 0 0
Total Non Cash Movements - C 0 0
GOVERNMENT OF ETHIOPIA
Cash Flow Statement
For the year ended 7 July 20X2
Ethiopian Birr '000
20X2 20X1
3 CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from external assistance 0 0
Proceeds from external loans 0 0
Total Receipts (A) 0 0
GOVERNMENT OF ETHIOPIA
Accounting Policies and Notes to Financial Statements
Domestic currency
Foreign currency
Budget support
Counterpart funds
SSDP
Cash in transit
Sinking fund
Others
Domestic currency refers to local currency held in a safe as well as in a bank account.
Foreign currency is cash held in a bank account denominated in foreign currency. Budget
support refers to cash from a foreign source held in a bank account available for unrestricted
general budgetary support. Counterpart funds refer to grants held in a bank account
reserved for specific program support.
2 Receivables
Advances
Prepayments
Others ___________ ______
Advances represent amounts due from government entities and staff. Prepayments
represent amounts due from suppliers, contractors and consultants. Others represent
amounts due from peasant associations, cooperatives, individuals, private organizations
and others.
GOVERNMENT OF ETHIOPIA
Accounts Payable
Payables within Government
Direct advances
Treasury bills
Deposits
Retentions ___________ ______
4 Tax Revenues
Tax revenues are legally mandated payments to government. Tax revenues represent taxes
on income, profits and capital gains, value added tax and sales turnover tax on domestically
manufactured goods and services, excise tax and foreign trade taxes which include excise
tax, value added tax, customs and export duties. The breakdown of tax revenues by revenue
item is provided in the statement of comparison of budget and actual amounts – domestic
revenue.
Non-tax revenues represent administrative fees and charges, sales of goods and services and
miscellaneous revenues. The breakdown of non tax revenues by revenue item is provided in
the statement of comparison of budget and actual amounts – domestic revenue.
GOVERNMENT OF ETHIOPIA
Accounting Policies and Notes to Financial Statements
6 Subsidies
Subsidy revenue represents treasury funds received by regions from the federal government
to execute their recurrent and capital budgets and subsidy expense represents treasury
funds transferred by the federal government to regions to execute their recurrent and capital
budgets.
7 Municipality Revenues
Municipality revenue represents different types of municipal taxes, municipal rents and
service charges and sale of goods and municipal services.
8 Other Revenues
9 Personnel Services
Personnel services represent government pension contributions made to pension funds and
salaries, wages, allowances/benefits paid to permanent, contracted, externally contracted
and casual staff. The breakdown of personnel services by expense item is provided in the
statement of comparison of budget and actual amounts – expenditure.
Goods and services represent expenditure incurred on goods and supplies, traveling,
maintenance and repairs, training, stocks of emergency and strategic goods and contracted
services. The breakdown of goods and services by expense item is provided in the statement
of comparison of budget and actual amounts – expenditure.
GOVERNMENT OF ETHIOPIA
Accounting Policies and Notes to Financial Statements
Fixed assets and construction represent expenditure incurred in the acquisition of fixed
assets and the pre-construction and construction of buildings and infrastructure. The
breakdown of fixed assets by expense item is provided in the statement of comparison of
budget and actual amounts – expenditure.
12 Other Expenses
13 External Assistance
External assistance represents the amounts contributed by donors as grants and are
recognized as revenue on receipt of funds. The breakdown of external assistance by donor is
provided in the statement of comparison of budget and actual amounts – external assistance.
14 External Loans
External loans represent amounts received from external lenders as loans during the fiscal
year and are recognized as revenue on receipt of funds directly or payments to suppliers on
behalf of the government. The breakdown of external loans by lenders is provided in the
statement of comparison of budget and actual amounts –external loans.
15 Capital Revenues
Capital revenue represents proceeds from the privatization of state owned enterprises, sale
of fixed assets, stocks and intangible assets and amounts received from non-governmental
sources for capital purposes. The breakdown of capital revenues by item of revenue is
provided in the statement of comparison of budget and actual amounts – domestic revenue.
GOVERNMENT OF ETHIOPIA
Accounting Policies and Notes to Financial Statements
16 Debt Repayments
Debt repayments to domestic and external lenders represent the principal amounts repaid
during the year and are recognized as expenditure. The breakdown of debt repayments by
internal and external debt is provided in the statement of comparison of budget and actual
amounts – expenditure.
17 Finance Costs
Finance costs represent payments of bank charges and interest on external and domestic
debt.
The amounts falling due for repayment within the next 12 months amount to Birr …..
Details of the lenders, date of obtaining loan, amount due in foreign currency and the period
of repayment are detailed below:
GOVERNMENT OF ETHIOPIA
Accounting Policies and Notes to Financial Statements
Maturity Analysis
Due within 1 year 0 0
Due within 2 to 5 years 0 0
Due after more than 5 years 0 0
The causes for material differences between the actual amounts and the budget amounts are
detailed below by item of revenue:
The causes for material differences between the actual amounts and the budget amounts are
detailed below by item of expenditure:
22 Contingent Liabilities
A list of contingent liabilities, explaining its type, nature and circumstances should be
provided together with a reliable estimate of the probable amount.
23 Other Notes
Any other notes and disclosures that MOFED may decide to include as part of the financial
statements.
GOVERNMENT OF ETHIOPIA
Accounting Policies and Notes to Financial Statements
Accounting Policies
The principal accounting policies of the Government, which are set out below, have been
applied consistently throughout the period.
BASIS OF ACCOUNTING
The financial statements have been prepared on the historical cost basis using a modified cash
basis of accounting that recognizes the following non-cash transactions:
Revenue is recognized when:
Amounts borrowed using treasury bills and direct advances from the National Bank
of Ethiopia are recognized as current liabilities
REVENUE
Finance costs are recognized as an expense in the period in which they are paid.
GOVERNMENT OF ETHIOPIA
Accounting Policies and Notes to Financial Statements
Accounting Policies
Transactions denominated in foreign currencies are translated into Ethiopian Birr at the rates
of exchange ruling at the date of the transaction.
Cash and bank balances that are denominated in foreign currencies are translated at the
rates of exchange ruling at the year end and the exchange gains/loss arising from such
translation are recognized as revenue/expenditure respectively.
CONSOLIDATION
The accounts of controlled entities are not consolidated– for example Ethiopian Airlines and
Ethiopian Telecommunications Corporation.
GOVERNMENT OF ETHIOPIA
Statement of Comparison of Budget and Actual Amounts - Domestic Revenue
for the year ended 7 July 20X2
Ethiopian Birr '000
20X2 20X1
Budget Actual Variance Budget Actual Variance
OPERATING REVENUE
Tax revenues
Tax on income, profit and capital gains
Value Added Tax on goods & services
Excise Tax
Sales turnover tax on goods & services
Stamp sales and duty
Customs Duty on imported goods
Excise Tax on imported goods
Value Added Tax on imported goods
Export Duties
Timber Tax
Municipality Tax revenue
Total tax revenues
Non-tax revenues
Administrative fees and charges
Sales of public goods and services
Miscellaneous revenue
Municipality revenues
Total non-tax revenues
Subsidies
External assistance
External loans
Total operating revenues
GOVERNMENT OF ETHIOPIA
Statement of Comparison of Budget and Actual Amounts - Domestic Revenue
for the year ended 7 July 20X2
Ethiopian Birr '000
20X2 20X1
Budget Actual Variance Budget Actual Variance
Other revenues
Government investment income
Dividend income
Residual surplus
Interest income and capital charges
Total government investment income
Contribution to pension funds
Capital revenue
Sale of properties, stock and intangible assets
Privatization proceeds
Capital transfers from non-governmental sources
GOVERNMENT OF ETHIOPIA
Total 0 0 0 0 0 0
GOVERNMENT OF ETHIOPIA
GOVERNMENT OF ETHIOPIA
20X2 20X1
Adjusted Adjusted
Emoluments
Total 0 0 0 0 0 0
Allowances/benefits
Total 0 0 0 0 0 0
Pension contributions
Total 0 0 0 0 0 0
Office supplies 0 0 0 0 0 0
Printing 0 0 0 0 0 0
Medical supplies 0 0 0 0 0 0
Educational supplies 0 0 0 0 0 0
Food 0 0 0 0 0 0
GOVERNMENT OF ETHIOPIA
Adjusted Adjusted
Miscellaneous equipment 0 0 0 0 0 0
Total 0 0 0 0 0 0
Per diem 0 0 0 0 0 0
Transport fees 0 0 0 0 0 0
Official entertainment 0 0 0 0 0 0
Total 0 0 0 0 0 0
Infrastructure 0 0 0 0 0 0
Military equipment 0 0 0 0 0 0
Total 0 0 0 0 0 0
GOVERNMENT OF ETHIOPIA
20X2 20X1
Adjusted Adjusted
Rent 0 0 0 0 0 0
Advertising 0 0 0 0 0 0
Insurance 0 0 0 0 0 0
Freight 0 0 0 0 0 0
Electricity charges 0 0 0 0 0 0
Telecommunication charges 0 0 0 0 0 0
Training services
Local training 0 0 0 0 0 0
External training 0 0 0 0 0 0
Stocks of food 0 0 0 0 0 0
Stocks of fuel 0 0 0 0 0 0
Other stocks 0 0 0 0 0 0
Total stocks 0 0 0 0 0 0
GOVERNMENT OF ETHIOPIA
20X2 20X1
Adjusted Adjusted
Fixed Assets And Construction Budget Actual Difference Budget Actual Difference
Military equipment 0 0 0 0 0 0
Total 0 0 0 0 0 0
Construction
Pre-construction activities 0 0 0 0 0 0
Construction of buildings-residential 0 0 0 0 0 0
Const. of building-non-residential 0 0 0 0 0 0
Construction of infrastructure 0 0 0 0 0 0
Total 0 0 0 0 0 0
SUBSIDIES 0 0 0 0 0 0
FINANCE COSTS
TOTAL 0 0 0 0 0 0
GOVERNMENT OF ETHIOPIA
20X2 20X1
Adjusted Adjusted
Total 0 0 0 0 0 0
Pension payments
Total 0 0 0 0 0 0
Government investment 0 0 0 0 0 0
Contingency 0 0 0 0 0 0
Miscellaneous payments 0 0 0 0 0 0
TOTAL EXPENSES 0 0 0 0 0 0
GOVERNMENT OF ETHIOPIA
Comparison of Original and Adjusted and Actual Amounts
6120 Allowances/benefits
6320 Construction
6000 TOTAL
GOVERNMENT OF ETHIOPIA
Statement of Expenditure by Functional Classification
for the year ended 7 July 20X2
Ethiopian Birr '000
6110 Emoluments
6120 Allowances/Benefits
6320 Construction
6400 OTHER PAYMENTS
TOTAL
GOVERNMENT OF ETHIOPIA
Summary Statement of Domestic and External Revenues
For the year ended 7 July 20X2
ITEM OF REVENUE
A. ORDINARY REVENUE
Direct Tax
Indirect Tax
Taxes on Foreign Trade
Government Investment Income
Other Revenue
Total Ordinary Revenue
B. EXTERNAL ASSISTANCE
Counter Part Fund Grants
Technical Assistance
Total External Assistance
C. CAPITAL REVENUE
Domestic Sources
Counter Part Fund Credit
External Loan
Total Capital Revenue
D. DOMESTIC BORROWING
GRAND TOTAL
GOVERNMENT OF ETHIOPIA
Summary Statement of Expenditure
For the year ended 7 July 20X2
Ethiopian Birr ‘000
Particulars Recurrent Expenditure Capital Expenditure Subsidies Total
Administrative & General Service: 100 series
Organs of State
Justice and Security
National Defense
General Services
Others:
Grand Total
GOVERNMENT OF ETHIOPIA
Summary Statement of Expenditure and its Financing
For the year ended 7 July 20X2
1. EXPENDITURE
A. Recurrent Expenditure
Administrative and General Service
Economic Service
Social Service
Other Service
Total Recurrent Expenditure
B. Capital Expenditure
Economic Development
Social Development
General Development
Other Development
Total Capital Expenditure
C. Subsidy to Regions
Total Expenditure
2. FINANCING
A. Domestic Revenue:
Tax Revenue
Non Tax Revenue
Total Domestic Revenue
B. External Assistance:
Counter Part Fund Assistance
Technical Assistance
Total External Assistance
C. Borrowings:
External Loan & Credit
Counter Part Fund Credit
Project Loan
External Loan Total
Domestic Loan
Direct Advance N.B.E.
Treasury Bills
Deposit & Other Account Balances
Net Domestic Loan & Other Deposit Accounts
Grace Period Credits
Total Borrowing
Total Financing