Accounting process, subsidies and adoption of international standards in Venezuela
The financial activity of public institutions and organizations generally depends on official subsidies, provided by the government entity, whether national, state or municipal, with the aim of responding to social and economic requirements of people and public entities.
In the economic sphere, subsidies are an important feature of public expenditure and therefore, they must adapt to the rules of budgetary policies, which govern the annual operating plan, identifying the strategic sectors to which public resources should be channeled, rationally and efficiently. , in order to achieve the objectives and goals, foreseen in the general development plan and in the budgetary project of each fiscal year. In this way, the public budget is on track for reasons of persistence and economic growth.
Today in Venezuela, the financial information originates from the different economic transactions of institutions or organizations, both public and private, which is finally presented in financial statements, under the regulations issued by the federation of public accounting colleges of Venezuela. Standards known under the name of accounting principles, existing until 2004 fifteen (15), of which twelve (12), plus the statement of accounting principles No. 0 (DPC-0), were in force until 2010.
In this way, the federation of colleges of public accountants of Venezuela (FCCPV) approved the adoption of international financial information standards (IFRS), issued by the council of international accounting standards (NIC), after review and interpretation of each of them, by the standing committee on accounting principles (CPPC), as agreed and initially approved by the federation, the financial statements of the year 2008, in the case of large companies, as well as for small and medium-sized companies ( PYMES) 2010, would be presented under the NICs and international financial reporting standards (IFRS) and the previously issued standards (CPD) were not applied by the federation of public accounting colleges of Venezuela. Which were modified according to the application bulletin VEN-NIF 6 (BA VEN-NIF6) dated July 2010, which indicates that the application date for SMEs is from January 2011
Likewise, it is pointed out that the change in an economic environment of an accounting system implies deep transformations, not only in the preparation of financial statements, but also accounting counters and assistants must be updated, the acquisition and updating of accounting software ; as well as users must learn to interpret the accounting information, developed under these criteria. The training institutions are called to implement new studies, methodologies and contents, referring to these standards.
At its own discretion, the advantages of adopting the (IFRS) are really important, which represent a sufficient justification to make the relevant changes in the organizations and carry out this adoption, taking into account that Venezuela is part of a globalized market and necessarily to stay in it, in a successful way, it is necessary to use a standardized financial and accounting language with respect to other countries, so that interested users can have transparent and comparable financial information. However, it is no less important, the economic disbursements that lead to this adoption, which is why national universities are already training public accounting professionals under the NIC / IFRS environment.
It is important to recognize that international standards require a learning process, where the first thing that must be done is to evaluate the effects and incidents that may have on the different sectors involved in the application of them. Among the International Accounting Standards are those issued by the council of international accounting standards of the public sector (IPSASB), which develops accounting standards for public sector entities called international accounting standards of the public sector (IPSAS). The IPSASB recognizes the important advantages of achieving consistent and comparable financial information across jurisdictions and believes that IPSASs will play a critical role in making these benefits materialize. The IPSASB strongly encourages public administrations and national standards issuers to participate in the development of their standards, commenting on the proposals set forth in their draft standards and consultation documents.
The IPSASB issues IPSASs related to financial information with an accounting basis of cash and accrual (or accrual). The accumulation (or accrual) IPSASs are based on international financial reporting standards (IFRS), when the requirements of these standards are applicable to the public sector. They also deal with aspects of financial information with special purposes that are not addressed in IFRS.
The adoption of IPSAS by governments will improve both the quality and the comparability of financial information presented by public sector entities from the various countries of the world. The IPSASB recognizes the right of governments and issuers of national standards to establish accounting standards and guidelines for financial information in their jurisdictions. The IPSASB recommends the adoption of IPSASs and the harmonization of national requirements with IPSAS. It should be noted that the financial statements comply with IPSAS only if they comply with all the requirements of each applicable IPSAS.
With the name of Public Administrations reference is made both to the administration of the government itself, as well as to government agencies and similar organizations, whether local, regional, national or international. Through the public budget, which is a fundamental part to grant an official subsidy or public aid.