© 2019 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank and Financial Reporting Frameworks Community of Practice members of the Public Sector Accounting and Reporting Program with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for non- commercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. CONTENTS CONTENTS ................................................................................................................................... i ACKNOWLEDGEMENT ............................................................................................................... iii Glossary ..................................................................................................................................... iv 1. Introduction ........................................................................................................................ 1 2. Structure of the multipurpose chart of accounts............................................................... 3 3. Multipurpose aspects ......................................................................................................... 4 3.1. International Public Sector Accounting Standards purposes...................................... 4 3.2. Government finance statistics purposes..................................................................... 5 3.3. Management accounting purposes ............................................................................ 6 3.4. Performance reporting purposes ................................................................................ 6 3.5. Budgetary reporting purposes .................................................................................... 6 4. Class 0 - Cash outflows and Class 9 - Cash inflows ............................................................. 8 4.1. Example of Accounts of Class 0 – Cash outflows ........................................................ 8 4.2. Example of Accounts of Class 9 – Cash inflows ........................................................... 9 4.3. Use of Class 0 and Class 9 for budget execution reports .......................................... 10 5. Class B0 - Budgeted cash outflows and Class B9 - Budgeted cash inflows ...................... 12 6. Statement of financial position accounts ......................................................................... 14 6.1. Class 1 - Current assets ............................................................................................. 14 6.2. Class 2 - Non-current assets ...................................................................................... 14 6.3. Class 3 - Net assets .................................................................................................... 15 6.4. Class 4 - Current liabilities ......................................................................................... 16 6.5. Class 5 - Non-current liabilities ................................................................................. 16 7. Statement of financial performance accounts ................................................................. 17 7.1. Class 6 - Revenue....................................................................................................... 17 7.2. Class 7 - Expenses ...................................................................................................... 17 7.3. Class 8 - Costs ............................................................................................................ 18 8. Class F - Off balance sheet accounts ................................................................................ 20 9. Classifier 1 - Programs ...................................................................................................... 21 10. Application of a classifier for consolidation purposes ..................................................... 22 11. Classifier 2 - Holding gains/losses .................................................................................... 23 i 12. Mapping table of segments of MCoA............................................................................... 24 13. Conclusion ........................................................................................................................ 25 ANNEX 1. Outline multipurpose chart of accounts ................................................................. 26 ii ACKNOWLEDGEMENT This good practice paper is a product of knowledge sharing and collaboration among Financial Reporting Frameworks Community of Practice (FINCOP) members of the Public Sector Accounting and Reporting (PULSAR) Program with support from the international experts. The FINCOP would like to recognize the following key contributors who provided extensive input: Davit Gamkrelidze (Georgia), Karen Alaverdyan (Armenia), João Carlos Fonseca (IPSASB), Agnieszka Stachniak (Poland), Andreas Bergmann and Sandro Fuchs (ZHAW), and Arman Vatyan, Abbas Kizilbash, and Vigen Yeghoyan (the World Bank). iii GLOSSARY GFS Government Finance Statistics GFSM IMF Government Finance Statistics Manual, 2014 IPSAS International Public Sector Accounting Standards MCoA Multipurpose Chart of Accounts iv 1. INTRODUCTION The PULSAR Program, launched in 2017, is a regional and country level program for 13 beneficiary countries in Europe and Central Asia. Its objective is to support the enhancement of public sector accounting and financial reporting frameworks, in line with international standards and in accordance with good practices, in order to improve government accountability, transparency, and performance. The objectives and scope of the PULSAR Program are jointly determined by the PULSAR Partners - Austria, Switzerland, and the World Bank – who also provide institutional support for its implementation and mobilize the resources needed for its activities. Beneficiary countries help shape the Program through regional cooperation platforms and input to two Communities of Practice focused on financial reporting frameworks and on education. The FINCOP supports government officials in developing reform strategies & roadmaps, and helps to define and implement improved legislation, standards, IT systems, and tools in the respective countries. The FINCOP have produced this paper to inform and assist PULSAR countries in updating or designing a full scope chart of accounts. There are different approaches in the design of charts of accounts used for various reporting purposes. This paper provides one solution that aims to integrate those. It has been developed as a good practice outline of the structure and function of a multipurpose chart of accounts (MCoA). The MCoA for the purpose of this paper means a chart of accounts that provides comprehensive information required for the preparation of International Public Sector Accounting Standards (IPSAS) based financial statements, while concurrently providing information for multiple other reporting purposes. IPSAS, as the only globally accepted accounting standards tailored to the specifics of the public sector, constitute the de facto public sector reporting guidelines. IPSAS are suitable for the compilation of Government Finance Statistics (GFS), indeed using this comprehensive, public sector specific accrual accounting framework greatly improves the source data needed to compile GFS reports. However, while there is a close relationship and considerable overlap between IPSAS and GFS reporting guidelines, they have different reporting boundaries and there are important conceptual differences between them. Use of a MCoA is one way to help bridge the differences; to facilitate the preparation of IPSAS based financial statements as well as to produce GFS based core financial statements defined by the Government Finance Statistics Manual, 2014 (GFSM), and to also provide data for other purposes including budgeting, performance, and management reporting. The paper outlines the structure and potential uses of an MCoA and discusses some specific aspects for consideration in its design. An outline MCoA is included in Annex 1. This was developed based on studies of the charts of accounts of several countries of the Europe and 1 Central Asia region, as well as collective input from the FINCOP members. The outline MCoA does not attempt to meet full IPSAS presentation and disclosure requirements. It is intentionally kept simple but covering most key requirements so that individual countries can use it as a starting point that they can further enhance and adapt to create a full working chart of accounts that meets their specific reporting needs. In the paper’s presentation of key conceptual issues, care was taken to maintain consistency with the technical guidelines of the reference frameworks. Nevertheless, it is recommended that the original sources are consulted with regards to specific technical questions related to recognition, measurement, and disclosure under IPSAS, ESA 2010, or GFSM 2014. 2 2. STRUCTURE OF THE MULTIPURPOSE CHART OF ACCOUNTS The basic structure of the MCoA should comprise the following classes: Class Brief description Class 0 - Cash outflows Accounts for recording actual cash outflows of budgetary expenditures Class 1 - Current assets Class 2 - Non-current assets Class 3 - Net assets Statement of financial position accounts Class 4 - Current liabilities Class 5 - Non-current liabilities Class 6 – Revenue Statement of financial performance accounts Class 7 – Expenses Class 8 – Costs Management accounts Class 9 – Cash inflows Accounts for recording actual cash inflows of budgetary receipts Class B0 – Budgeted cash outflows Off balance sheet accounts for recording original budgeted expenditure and their settlement Class B9 – Budgeted cash inflows Off balance sheet accounts for recording original budgeted receipts and their settlement Class F – Off balance sheet Off balance sheet accounts except for accounts B0 accounts and B9. The MCoA presents classes, accounts, and sub-accounts, but it does not include a comprehensive list of accounts. Each country should tailor the MCoA to address its specific circumstances and needs. It is also envisaged that entities should themselves be able to create and edit sub-accounts to a certain level to allow for a more flexible application of the MCoA. 3 3. MULTIPURPOSE ASPECTS The MCoA can be used for multiple purposes, including: • For preparation of IPSAS based financial statements; • For preparation of GFS based core financial statements; • For management accounting; • For performance reporting; • For budgetary reporting. 3.1. International Public Sector Accounting Standards purposes The main focus of the MCoA is to enable users to prepare IPSAS based financial statements. The MCoA structure and nature of included groups, accounts, and sub-accounts are used to prepare the following IPSAS based general purpose financial statements plus budget comparison statement: • Statement of financial position – mainly prepared using the balances of the accounts in Class 1-5; • Statement of financial performance – mainly prepared using the turnover of the accounts in Class 6-7; • Statement of changes in net assets/equity – mainly prepared using balances and turnover of the accounts in Class 3. • Cash flow statement – prepared using the accounts in Class 0 and 9; • Notes - prepared using the entire chart, including off balance sheet accounts. Discloses information required by IPSAS not included in the preceding primary financial statements. Also details the basis of preparation of financial statements and specific accounting policies used. • Statement of comparison of budget and actual amounts as defined by IPSAS 24 “Presentation of budget information in financial statements” – prepared using accounts Class B0 and B9; and Class 0 and Class 9. The structure of the MCoA is mainly defined by the preparation of the above-mentioned financial statements. However, with certain adaptations the multipurpose chart may also be used for GFS purposes (statistical purposes), performance purposes, and management accounting purposes. 4 3.2. Government finance statistics purposes To serve GFS purposes, the MCoA should fulfil GFS core reporting needs. In accordance with GFSM the following financial statements shall be provided: • Statement of operations – summarizes the transactions of an entity in a given reporting period; • Statement of sources and uses of funds – records cash inflows and outflows using a classification similar to that of the statement of operations, but with a focus on the net change in cash flows arising from transactions during the reporting period; • Statement of other economic flows – presents changes to stock positions of assets, liabilities, and net worth that come about for reasons other than transactions (holding gains/losses and other changes in the volume of assets and liabilities); • Balance sheet – records the stock positions of assets, liabilities, and net worth of the entity at the end of each reporting period. The MCoA provided in this paper is customized to ensure that the core reporting needs defined by GFSM are fulfilled. The following customizations are made to achieve this: • Class 0 - Cash outflows and Class 9 - Cash inflows are added to the MCoA ensuring the cash expenditures and receipts of the entity are registered using GFS classification and enabling preparation of the statement of sources and uses of funds. In countries where the budget structure differs from GFS classification, Classes 0 and 9 should mirror their budget structure; • Valuation is taken as an example of capturing difference between IPSAS and GFS reporting1. For this purpose, a group of accounts for each class of assets and liabilities enables separate accounting of accumulated effect of holding gains and losses. These are subsequently added to the carrying amounts of the assets and liabilities enabling preparation of the balance sheet for GFS purposes; • Class 6 - Revenue and Class 7 - Expenses including holding gains and losses arising from current market valuation of assets and liabilities and Classifier 2 - Holding gains/losses2 are added to the MCoA. This enables users to maintain gains/losses arising from current market valuations by using revenue and expenses classification provided by GFS for the purpose of preparation of the statement of operations. For example, for accounting holding loss incurred on inventory, Classifier line H22 - Use of goods and services is used as follows: 1 For more information please refer to the PULSAR Knowledge product Benchmarking Guide: Integrating Public Sector Accounting and Government Finance Statistics. 2 Please see Section 10 Classifier 2- Holding gains/losses 5 DR 741- Loss from current market value effects on stocks Classifier line H22 - Use of goods and services CR 1311- Effect on current non-financial assets 3.3. Management accounting purposes The objective of Class 8 - Costs of the MCoA is to establish the basis for the development of a management accounting system. Class 8 is not structured in a compulsory manner. Rather, it presents a type of costing method that can be used as an example, i.e. direct/indirect costing. The government could define the costing method to be applied by public entities such as ABC costing, marginal costing, etc. otherwise it can adopt a policy to give flexibility for the entities to select a costing method, enabling the accounting function of the entity to implement a reporting system suitable for its management’s needs. 3.4. Performance reporting purposes For performance reporting purposes, the MCoA has the addition of Classifier 1 - Programs. 3 Generally speaking, this outlines all the activities and/or sub-activities under the executed programs. Class 7 - Expenses is structured on the basis of programs under the corresponding functions of the government such as health, education, defense, public order and safety, etc. This classification is provided by both IPSAS 1 “Presentation of financial statements” and GFSM (called classification of expenditure by functions of government). Each time the entity registers an expense, it chooses the activity for which the expense is incurred from the defined list of Classifier 1 - Programs. The same Classifier is applied when registering costs using Class 8 - Costs and cash outflows using Class 0 – Cash outflows. 3.5. Budgetary reporting purposes IPSAS 24 defines the concepts for preparation of the statement of comparison of budget and actual amounts. This statement is a complementary statement that can be added to the general purpose financial statements based on IPSAS if required by the government. For this purpose, Class B0 - Budgeted cash outflows and Class B9 - Budgeted cash inflows are added to the MCoA as off balance sheet classes. These classes have the identical structure and 3 Please see Section 9 Classifier 1- Programs 6 content of Class 0 - Cash Outflows and Class 9 - Cash inflows enabling users to prepare budget execution and comparison reports. 7 4. CLASS 0 - CASH OUTFLOWS AND CLASS 9 - CASH INFLOWS Accounts of Class 0 and Class 9 are used for recording cash inflows and cash outflows in the captions provided by the budget execution reports defined by the government. The structure and content of Class 0 and Class 9 are determined by the captions of the budget and budget execution reports. Budgets and budget execution reports usually provide great detail about particular activities, programs, or entities. These details often have a level of aggregations under common headings and classifications. The disclosure of budget and budget execution information should be consistent with those headings and classifications ensuring compliance with legislative requirements. The government should tailor their MCoA to enable users to obtain information required for budget execution reporting purposes. The use of Class 0 and Class 9 is a straightforward and clear method of recording cash inflow and cash outflows and is well suited to countries without sophisticated government financial management information systems. There are alternative methods, for example using classifiers attached to each account, although these can be complex to manage when public entities often have more than one account; or using a separate class, for example for capital expenditure, but these are not addressed in this paper. In the outline MCoA at Annex 1, the structure of Class 0 and Class 9 is conditioned by GFS reporting needs and its classification of flows. 4.1. Example of Accounts of Class 0 – Cash outflows There follows an illustrative example of the use of Class 0. The accounts of Class 0 are debited to cash and cash equivalents accounts and credited to payables as shown below when payment is made: Accrual of wages and salaries. DR 7111-Employee compensation (General public services) CR 412- Payables to employees Execution of cash outflow for wages and salaries. DR 0211-Wages and salaries CR 128-Treasury accounts Payable is settled. DR 412- Payables to employees 8 CR 0211-Wages and salaries The same is applicable, when an item of property, plant, and equipment is acquired: Recognition of property, plant, and equipment. DR 211-Property, plant, and equipment available for use CR 414- Other payables Execution of cash outflow for acquisition of property, plant, and equipment. DR 03111-Cash outflows related to property, plant, and equipment CR 128-Treasury accounts Payable is settled. DR 414- Other payables CR 03111-Cash outflows related to property, plant, and equipment The diagram below illustrates the use of Class 0 accounts. Credit Debit Cash Class Debit Credit (Treasury accounts, 0 Payables Class 0 Class 0 Bank accounts, Petty cash) 4.2. Example of Accounts of Class 9 – Cash inflows There follows an illustrative example of the use of Class 9. The accounts of Class 9 are credited to cash and cash equivalents accounts as shown below when payment is received: Accrual of revenue from taxes. DR 12111-Domestic receivables from non-exchange transactions (taxes and transfers) CR 6111- Revenue from taxes on income, profits, and capital gains Receipt of cash inflows related to taxes. DR 128-Treasury accounts 9 CR 9111-Taxes on income, profits, and capital gains Settlement of receivable. DR 9111-Taxes on income, profits, and capital gains CR 12111-Domestic receivables from non-exchange transactions (taxes and transfers) The diagram below illustrates the use of Class 9 accounts. Debit Credit Cash Class Credit Debit (Treasury accounts, 9 Receivables Class 9 Class 9 Bank accounts, Petty cash) 4.3. Use of Class 0 and Class 9 for budget execution reports The accounting entries related to Class 0 and Class 9 are summarized in the diagram below: 1) DR Class 0 1) DR Cash CR Cash CR Class 9 2) DR Payables 2) DR Class 9 CR Class 0 CR Receivables As provided in IPSAS 24, entities may elect to or may be required to prepare budget execution reports, including comparison of budget and actual amounts. Recording of cash outflows and inflows in the manner provided above will enable users to obtain budget execution information at any given time. IPSAS 24 emphasizes that the comparison is to be made on the same basis of accounting as adopted for the budget, even if that basis is different from the basis adopted for the financial statements. Class 0 and Class 9 in the outline MCoA at Annex 1 record all the expenditures and receipts on cash basis. Hence, the use of Class 0 and Class 9 10 is vital for entities that are required to report under cash or modified cash basis.4 Entities required to present their budget execution report under accrual basis can use Classes 6, 7, and 8.5 Classifier 1 - Programs should be attached to the account of Class 0 for allocating outflows to different sub-programs and activities (key performance indicators) enabling the users to obtain performance related information.6 The information accounted under Classes 0 and 9 enables users to prepare the cash flow statement using direct method as defined by IPSAS 2 “Cash flow statements”. 4 Please see Section 5 Class B0 - Budgeted cash outflows and Class B9 - Budgeted cash inflows for further discussion of the mechanisms enabling comparison of actual amounts to original budgeted amounts. 5 Discussed in Section 7 Statement of financial performance. 6 More details are provided in Section 9 Classifier 1- Programs 11 5. CLASS B0 - BUDGETED CASH OUTFLOWS AND CLASS B9 - BUDGETED CASH INFLOWS Class B0 and Class B9 are used for recording the original budgeted flows derived from approved budget of the entity. Accounts of Class B0 and B9 have the exact same structure and content of Class 0 and 9 giving users budgeted information input to the accounting system. The accounts are off-balance sheet and not part of the accounting of assets and liabilities. Single entry bookings are made to record estimated budgeted flows and settlements, as illustrated in the example provided below: Input of budgeted expenditure in the accounting system. DR B0211-Wages and salaries; B0221- Supplies; B0263- Grants. Settlement of budgeted expenditure based on the Class 0 transactions7. CR B0211-Wages and salaries; B0221- Supplies; B0263- Grants. The same bookings are made using Class B9 to record budgeted receipts and settlements. As provided above, off-balance sheet accounts enable users to obtain the remaining balance of budgeted expenditures and budgeted receipts at any given time. The structure and content of Class B0 and B9 must be identical to Class 0 and 9 so users can prepare statement of comparison of budget and actual amounts as provided by IPSAS 24. An example format of the statement of comparison of budget and actual amounts as defined by IPSAS 24 is set out below: Budgeted Amounts Actual Difference (in currency units) Amounts on Original Budget Original Final Comparable Basis and Actual RECEIPTS Taxation X X X X Proceeds: Disposal of X X X X plant and equipment … X X X X Total receipts X X X X 7 DR 0211-Wages and salaries; 0221- Supplies CR - 228-Treasury accounts; 229-Bank accounts 12 Budgeted Amounts Actual Difference (in currency units) Amounts on Original Budget Original Final Comparable Basis and Actual PAYMENTS Health (X) (X) (X) (X) Education (X) (X) (X) (X) … (X) (X) (X) (X) Total payments (X) (X) (X) (X) NET X X X X RECEIPTS/(PAYMENTS) Classifier 1- Programs should be attached to the account of Class B0 for allocating budgeted outflows to different sub-programs and activities (key performance indicators) enabling users to obtain performance related information.8 8 More details are provided in Section 9 Classifier 1 - Programs 13 6. STATEMENT OF FINANCIAL POSITION ACCOUNTS Accounts of Classes 1-5 are used for recording bookings of balance sheet accounts: non- current assets, current assets, net assets, non-current liabilities, and current liabilities. In the outline MCoA at Annex 1, the accounts in Classes 1-5 are structured to enable users to prepare the statement of financial position as defined by IPSAS 1 “Presentation of financial statements”. The segregation of accounts and sub-accounts enables users to prepare GFS based financial statements, including statement of operations, statement of uses and sources of funds, and balance sheet. 6.1. Class 1 - Current assets Class 1 - Current assets includes the following groups of accounts: • 11 Current non-financial assets; • 12 Current financial assets; • 13 Current market value effect on current assets stocks (GFS purposes). Other groups may be added according to the particularities and reporting needs of the country. As provided above, the segregation of current assets into financial and non-financial assets is compliant with GFS reporting requirements enabling the user to prepare GFS based financial statements. The accounts of Group 13 Current market value effect on current assets stocks (GFS purposes) is used to register the effects of holding gain/losses separately from the carrying amount of the current assets. The mechanism is the same as for the non-current assets.9 6.2. Class 2 - Non-current assets Class 2 - Non-current assets includes the following groups of accounts: • 21-22 Non-current non-financial assets; • 23 Non-current financial assets; • 24 Current market value effect on non-current assets stocks (GFS purposes). Other groups may be added according to the particularities and reporting needs of the government. As provided above, the segregation of non-current assets into financial and non- 9 Please see Section 6.2 Non-current assets. 14 financial assets is compliant with GFS reporting requirements enabling the user to prepare GFS based financial statements. For example, the accounts of Group 24 Current market value effect on non-current assets stocks (GFS purposes) is used to register effects of holding gain/losses separately from the carrying amount of the property, plant, and equipment accounted under Account 211 Property, plant, and equipment available for use, Account 213 Property, plant, and equipment not available for use, etc. In accordance with GFSM, stock positions of assets and liabilities should be valued at market value - that is, as if they were acquired in market transactions on the balance sheet reporting date (reference date). Therefore, the value of an asset at any given time is its current market value, which is the amount that would have to be paid to acquire the asset on the reporting date, taking into account its age, condition, and other relevant factors. In accordance with IPSAS 17 “Property, plant, and equipment”, items of property, plant, and equipment are initially measured at cost, whereas subsequent measurement is done using the cost model or revaluation model in compliance with an entity’s accounting policy. For example, the carrying amount of building as at 31 December 2018 is 10,000 currency units. The current market value as at 31 December 2018 is 11,000 currency units. For GFS purposes current market valuation should be registered under Account 24111 “Current market value effect on property, plant and equipment”. The booking of holding gain is made as follows: DR 24111- Current market value effect on property, plant and equipment CR 631- Gain from current market value effects on stocks Classifier line H23 - Consumption of fixed capital In line with its aim of providing a single chart of accounts able to be used for both financial purposes (as defined by IPSAS) and statistical purposes (as defined by GFSM), the MCoA includes specific contra-regulating accounts of Group 24 for recording the effect of current market valuations. The balance of accounts of Group 24 should be added for preparing a balance sheet based on GFS. 6.3. Class 3 - Net assets Class 3 - Net assets includes the following groups of accounts: • 31 Contributed capital; • 32 Differences from revaluation; 15 • 33 Accumulated surplus/deficit • 34 Other provisions; • 35 Holding gain/loss accumulated effect – GFS purposes. Accounts under Class 3 are used for recording transactions in net assets. Group 33 is used for recording accumulated balance of surplus or deficit. Accounts under Group 35 are used for accumulating the effects of current market valuations, that are not accumulated under accounts of Group 33 Accumulated surplus/deficit. Accounts under Group 35 consist of realized and unrealized accumulated holding gains/losses. 6.4. Class 4 - Current liabilities Class 4 - Current liabilities includes the following groups of accounts: • 41 Short-term financial liabilities; • 42 Other current liabilities; • 43 Current market value effect on current liabilities stocks (GFS purposes). The accounts of Group 43 Current market value effect on current liabilities stocks (GFS purposes) is used to register the effects of holding gains/losses separately from the carrying amount of the current liabilities. The mechanism is the same as for the assets. 10 6.5. Class 5 - Non-current liabilities Class 5 - Non-current liabilities includes the following groups of accounts: • 51 Long-term financial liabilities; • 52 Other non-current liabilities; • 53 Current market value effect on non-current liabilities stocks (GFS purposes). The accounts of Group 53 Current market value effect on non-current liabilities stocks (GFS purposes) is used to register the effects of holding gains/losses separately from the carrying amount of non-current liabilities. The mechanism is the same as for the assets.11 10 Please see Section 6.2 Non-Current Assets 11 Ibid. 16 7. STATEMENT OF FINANCIAL PERFORMANCE ACCOUNTS Accounts of Classes 6-7 are used for recording bookings of statements of financial performance accounts: revenue and expenses. In the outline MCoA at Annex 1, the accounts in Classes 6-7 are structured to enable users to prepare the statement of financial performance as defined by IPSAS 1 “Presentation of financial statements”. The segregation of accounts and sub-accounts will enable users to prepare the GFS based statement of operations. 7.1. Class 6 - Revenue Class 6 - Revenue includes the following groups of accounts: • 61 Budget revenue from non-exchange transactions; • 62 Revenue from exchange transactions; • 63 Other gains. Account 631 Gain from current market value effects on stocks is envisaged for recording the positive difference between current market and carrying values of assets and liabilities. Realized and unrealized parts can be differentiated by opening sub-accounts. Classifier 2 - Holding gains/losses should be attached to Account 631 for differentiating gains to be posted to the accounts and presented on the face of statement of operations prepared based on GFS.12 7.2. Class 7 - Expenses Class 7 - Expenses include the following groups of accounts: • 71-72 Program expenses; • 73-74 Other expenses and losses. Accounts under Group 71-72 are differentiated based on programs such as health, education, defense, public order, and safety. This classification is provided both by IPSAS 1 and GFSM (called classification of expenditure based by functions of government). Classifier 1 - Programs should be attached to the account of Class 7 for allocating expenses to different sub-programs 12 More details are provided in Section 10 Classifier 2 - Holding gains/losses 17 and activities (key performance indicators) enabling the users to obtain performance related information.13 Account 741 Loss from current market value effects on stocks is envisaged for recoding any negative difference between current market and carrying values of assets and liabilities. Realized and unrealized parts can be differentiated by opening sub-accounts. Classifier 2 - Holding gains/losses should be attached to Account 741 for differentiating losses to be posted to the accounts presented on the face of Statement of Operations prepared based on GFS.14 7.3. Class 8 - Costs It is advisable to tailor the chart of accounts for small entity and larger entity users, while maintaining overall integrity of the chart of accounts to avoid any inconsistent application. The outline MCoA at Annex 1 therefore proposes including Class 8 Costs, enabling larger entities to maintain management accounting. The application of Class 8 Costs is not compulsory for the entity’s entire operation and can be limited to certain program type expenses or exchange transaction related costs. Evidently, the accounts differentiation of Class 8 is vastly dependent on the costing method applied by the entity. Hence, in the outline MCoA at Annex 1, accounts are defined using a direct/indirect method and are included for presentation purposes only; this should be changed by the entity when a different costing method is used. Classifier 1 - Programs should be attached to the accounts of Class 8 for allocating costs to different sub-programs and activities (key performance indicators) enabling users to obtain performance related information.15 One example of using Class 8 is ABC Costing applied in medical clinics. Class 7 provides users only with information on the nature and function of expenses using Account 717 Health - cost of services with the corresponding sub-accounts. As illustrated below, use of Class 8 accounts recognizes expenses based on professionals, providing detailed information on incurred costs that are essential for the effective management of medical clinics. This could highlight, for example, that the costs of surgeons are much higher than the service price. The method and detail of information to be accounted under Class 8 will vary depending on the needs of management. The following steps might be performed: • Identify the activities carried out by medical clinics – performance of surgeries, consultations, provision of continuous care, and clinical support. An appropriate account should be opened for each activity, such as Account 811 Production costs 13 More details are provided in Section 9 Classifier 1 - Programs 14 More details are provided in Section 10 Classifier 2 - Holding gains/losses 15 More details are provided in Section 9 Classifier 1 - Programs 18 related to surgeries. • Assign costs to each activity, for example, remuneration of surgeons and remuneration of physicians. Within each activity’s account, specific sub-accounts should be opened to recognize assigned costs such as remuneration of surgeons and physicians, for example Account 8111 Remuneration of surgeons and Account 8121 Remuneration of physicians. As a result, the user obtains all costs per activity, for example all costs related to surgeries. • Recognized remuneration costs accumulated under Account 8111 Remuneration of surgeons and Account 8121 Remuneration of physicians are then transferred to the single Account 7171 Health - Employee compensation. 19 8. CLASS F - OFF BALANCE SHEET ACCOUNTS Class F – Off balance sheet accounts include the following groups of accounts: • F1 Assets not belonging to entity; • F2 Contingent assets and liabilities; • F3 Other off balance sheet accounts. Off balance sheet accounts are used for preparation of Notes to the financial statements as well as for other supporting information required for the reporting needs of the entity. Single entry bookings are made to record transactions with these accounts. 20 9. CLASSIFIER 1 - PROGRAMS As has been mentioned in other sections of this paper Classifier 1 - Programs enables users to choose from a predefined list of activities and sub-activities within the budget program in the scope of which the expense/cost is incurred. Below is an example of Classifier 1 – Programs: 01 General public services 01.1 Executive and legislative organs, financial and fiscal affairs, external affairs 01.2 Foreign economic aid 01.3 Research & development general public services 01.4 Public debt transactions 02 Public order and safety 02.1 Police services 02.2 Fire-protection services 02.3 Prisons 03 Housing and community 03.1 Housing development 03.2 Community development 03.3 Water supply 03.4 Street lightning ... This example is a simplified version of the program budgeting tree. Usually it has more than 2 levels of classes and is defined by government for each budgetary year. 21 10. APPLICATION OF A CLASSIFIER FOR CONSOLIDATION PURPOSES It is vital to set standardization mechanisms to enable the smooth process of preparing consolidated financial statements. This paper does not explicitly provide procedures for the consolidation process. This should be addressed separately, given its complexity and country specific nature. Nevertheless, the MCoA can be structured to help facilitate the process of consolidation, for example by adding the Public Sector Entities Classifier. This will enable entities to register accounting entries with public sector entities, such as receipt of grants from government agencies, using compulsory code-lines of classifier. Intragroup transactions can then easily be eliminated at the consolidation level by excluding such transactions. 22 11. CLASSIFIER 2 - HOLDING GAINS/LOSSES Classifier 2 - Holding gains/losses enables users to maintain gains/losses arising from current market valuations by using revenue and expenses classification provided by GFS for the purpose of preparation of the statement of operations. For facilitated application of Classifier 2 - Holding gains/losses, the numbering is linked to GFSM classification. An example of a classifier is given below. More detailed classification may be needed depending on the detail of the statement of operations prepared based on GFS. H1 Revenue H11 Taxes H12 Social contributions H13 Grants H14 Other revenue H2 Expense H21 Compensation of employees H22 Use of goods and services H23 Consumption of fixed capital H24 Interest H25 Subsidies H26 Grants H27 Social benefits H28 Other expense 23 12. MAPPING TABLE OF SEGMENTS OF MCOA Usually, the chart of accounts configuration represents the hierarchical structures of groups of classifications of information requirements. Each classification group is often called a segment and identifies a discrete information requirement for management, reporting and control purposes. Each segment can be combined with the others to meet the reporting needs of the country. The combinations of segments and the numbering sequence of the coding structure are used for achievement of specific objectives needed by the country. The below table summarizes the commonly used classification and refers either to already build-in features of MCoA to fulfil the classification forms or provides the tools that can be used for achieving it. Commonly Used Reference to MCoA Classifications/Segments Economic (or Natural MCoA classification system is based on economic segment account) classification for fulfilling the reporting needs provided by IPSASs Administrative or Classifiers can be used to achieve administrative or organizational classification organizational classification in case if required by country reporting needs. Classifiers can be attached to all accounts specified by the MCoA. Fund classification (which Classifiers can be used to achieve fund/donor classification may include donor in case if required by country reporting needs. Classifiers classifications) can be attached to all accounts specified by the MCoA. Program classification Classifier 1 “Programs” is envisaged for achieving this classification Classification of Functions Class 7 is developed to achieve the COFOG such as general of Government (COFOG) public services, health, education etc. Location or geographic Classifiers can be used to achieve location or geographic classification classification in case if required by country reporting needs. Classifiers can be attached to all accounts specified by the MCoA. 24 13. CONCLUSION There is a growing need in the public sector for multipurpose MCoAs that can serve the various reporting needs of the public entities. IPSAS are high quality global financial reporting standards for application by public sector entities, that establish recognition, measurement, presentation, and disclosure requirements, and treat transactions and events in general purpose financial statements. Hence, MCoAs developed on the basis of IPSAS accounting are being widely adopted. Such MCoAs enable facilitated customization to add features that enable users to serve other reporting needs, including statistical, management, performance, and budgetary, through capturing accounting information in a structured manner. At the same time, the MCoA provides public entities with a unique tool containing all options in one and offering a more efficient and more flexible responsiveness to the reporting requirements of stakeholders. Hereby, it is worth mentioning that accounts envisaged for GFS reporting such as holding gains/losses should be used for achievement of sectorial reporting objectives given that the information needs required for GFS financial statements will be obtained through other means. Nevertheless, if a country chooses to apply it in the scope of entity level accounting, accounts envisaged for GFS reporting will be correspondingly applied. With the implementation and further development of a MCoA, public entities will increase the quality of overall reporting and maximize the comprehensiveness of their financial information. 25 ANNEX 1. OUTLINE MULTIPURPOSE CHART OF ACCOUNTS CLASS 0. CASH OUTFLOWS Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 021 1 CASH OUTFLOWS RELATED TO COMPENSATION OF EMPLOYEES 0211 1 Wages and salaries 0212 1 Employers' social contributions 022 1 PAYMENT FOR PURCHASE OF GOODS AND SERVICES 0221 1 Supplies 0222 1 Repair and maintenance 0223 1 Utility expenses 0224 1 Consultancy 0225 1 Office supplies 0226 1 Rent 0227 1 Other 024 1 INTEREST PAID 0241 1 To non-residents 0242 1 To residents other than general government 0243 1 To other general government units 025 1 SUBSIDIES PAID 0251 1 To public corporations 0252 1 To private enterprises 0253 1 To other sectors 026 1 GRANTS PAID 0261 1 To foreign governments 0262 1 To international organizations 26 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 0263 1 To other general government units 027 1 CASH OUTFLOWS RELATED TO SOCIAL BENEFITS 0271 1 Social security benefits 0272 1 Social assistance benefits 0273 1 Employment-related social benefits 028 1 OTHER OUTFLOWS 0281 1 Property expense other than interest 0282 1 Transfers not elsewhere classified 0283 1 Premiums, fees, and claims related to non-life insurance and standardized guarantee schemes 031 1 CASH OUTFLOWS RELATED TO NON-FINANCIAL ASSETS 0311 1 Cash outflows related to non- current non-financial assets 03111 1 Cash outflows related to property, plant and equipment 03112 1 Cash outflows related to intangible assets 03113 1 Outflows related to biological assets 03114 1 High value assets 03115 1 Non-produced (having natural origin) tangible assets 03116 1 Investment property 03117 1 Cash outflows related to other non-financial assets 0312 1 Cash outflows related to inventories 032 1 ACQUISITION OF FINANCIAL ASSETS 27 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 0321 1 Domestic financial assets 0322 1 External financial assets 033 1 REPAYMENT OF FINANCIAL LIABILITIES 0331 1 Domestic financial liabilities 0332 1 External financial liabilities CLASS 1. CURRENT ASSETS Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 11 CURRENT NON-FINANCIAL ASSETS 111 Materials 112 Strategic inventories 113 Consumable biological assets 114 Work in progress 115 Finished goods 116 Goods 117 Reduction of the cost of inventories 118 Other current non-financial assets 1181 Prepayments given 12 CURRENT FINANCIAL ASSETS 121 Receivables 1211 Domestic receivables 12111 Receivables from non- exchange transactions (taxes and transfers) 12112 Receivables from exchange transactions 1212 Foreign receivables 28 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 12121 Receivables from non- exchange transactions (taxes and transfers) 12122 Receivables from exchange transactions 122 Loans 1221 Domestic loans 1222 Foreign loans 123 Held to maturity investments - current 1231 Held to maturity domestic investments 1232 Held to maturity foreign investments 124 Financial assets through surplus or deficit - current 1241 Domestic financial assets through surplus or deficit 1242 Foreign financial assets through surplus or deficit 125 Available for sale financial assets - current 1251 Available for sale financial domestic assets 1252 Available for sale financial foreign assets 126 Provision for impairment (uncollectibility) of current financial assets 1261 Provision for impairment of current financial assets arising from exchange transactions 1262 Provision for impairment of current financial assets arising from non-exchange transactions 127 Petty cash 128 Treasury accounts 29 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 129 Bank accounts 13 CURRENT MARKET VALUE EFFECT ON CURRENT ASSETS STOCKS (GFS PURPOSES) 131 Current market value effect on current assets 1311 Effect on current non-financial assets 1312 Effect on current financial assets CLASS 2. NON-CURRENT ASSETS Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 21-22 NON-CURRENT NON- FINANCIAL ASSETS 211 Property, plant and equipment available for use 212 Depreciation of property, plant and equipment 213 Property, plant and equipment not available for use 214 Property, plant and equipment leased under finance lease 215 Depreciation of property, plant and equipment leased under finance lease 216 Service concession assets 217 Service concession assets depreciation 218 High value assets 219 Non-produced (having natural origin) tangible assets 2191 Land 30 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 2192 Mineral resources 2193 Non-cultivated biological resources 2194 Water resources 221 Biological assets 2211 Biological assets carried at fair value 2212 Biological assets carried at historical cost 222 Depreciation of biological assets 223 Investment property 2231 Investment property carried at historical cost 2232 Investment property carried at fair value 224 Depreciation of investment property carried at historical cost 225 Intangible assets 2251 Produced intangible assets 2252 Non-produced (having natural origin) intangible assets 2253 Goodwill 226 Amortization of intangible assets 2261 Amortization of produced intangible assets 2262 Amortization of non-produced intangible assets 227 Unfinished intangible assets 2271 Produced unfinished intangible assets 2272 Non-produced (having natural origin) unfinished intangible assets 228 Other non-current assets 31 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 2281 Prepayments given 229 Impairment of non-current non-financial assets 2291 Impairment of property, plant and equipment 2292 Impairment of investment property 2293 Impairment of intangible assets 23 NON-CURRENT FINANCIAL ASSETS 231 Loans and receivables – non- current 2311 Domestic loans and receivables 2312 Foreign loans and receivables 232 Held to maturity investments – non-current 2321 Held to maturity domestic investments 2322 Held to maturity foreign investments 233 Financial assets through surplus or deficit – non-current 2331 Domestic financial assets through surplus or deficit 2332 Foreign financial assets through surplus or deficit 234 Available for sale financial assets – non-current 2341 Available for sale financial domestic assets 2342 Available for sale financial foreign assets 235 Investments in associates 236 Investments in joint ventures 237 Investments in subsidiaries 32 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 238 Impairment (uncollectability) of non-current financial assets 24 CURRENT MARKET VALUE EFFECT ON NON-CURRENT ASSETS STOCKS (GFS PURPOSES) 241 Current market value effect on non-current assets 2411 Effect on non-current non- financial assets 24111 Effect on property, plant and equipment 24112 Effect on service concession assets 24113 Effect on high value assets 24114 Effect on non-produced (having natural origin) tangible assets 24115 Effect on biological assets 24116 Effect on investment property 24117 Effect on intangible assets 24118 Effect on unfinished intangible assets 24119 Effect on other non-current assets 2412 Effect on non-current financial assets CLASS 3. NET ASSETS/EQUITY Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 31 CONTRIBUTED CAPITAL 311 Contributed capital 33 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 32 DIFFERENCES FROM REVALUATION 321 Revaluation surplus of property, plant and equipment 322 Unrealized gains and losses from fair value measurement of available for sale financial assets 323 Translation reserve of foreign operations 33 ACCUMULATED SURPLUS/DEFICIT 331 Accumulated surplus/deficit 34 OTHER PROVISIONS 341 Other provisions 35 HOLDING GAIN/LOSS ACCUMULATED EFFECT (GFS PURPOSES) 351 Holding gain/loss accumulated effect 3511 Realized holding gain/loss accumulated effect 3512 Unrealized holding gain/loss accumulated effect CLASS 4. CURRENT LIABILITIES Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 41 SHORT TERM FINANCIAL LIABILITIES 411 Payables -supplies 4111 Domestic supplies 4112 Foreign supplies 412 Payables -employees 34 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 4121 Domestic employees 4122 Foreign employees 413 Payables - taxes and transfers 414 Other payables 4141 Other domestic payables 4142 Other foreign payables 415 Loans accounted at amortized cost 4151 Domestic loans 4152 Foreign loans 416 Liabilities under finance lease accounted at amortized cost 417 Debts related to transfers from the state budget 418 Other financial liabilities carried at amortized cost 4181 Other financial domestic liabilities carried at amortized cost 4182 Other financial foreign liabilities carried at amortized cost 419 Financial liabilities carried at fair value 4191 Financial domestic liabilities carried at fair value 4192 Financial foreign liabilities carried at fair value 42 OTHER CURRENT LIABILITIES 421 Prepayments received 4211 Domestic prepayments received 4212 Foreign prepayments received 422 Current liabilities in relation to complying with conditions 423 Current provisions 35 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 4231 Current provisions 4232 Current part of non-current provisions 429 Other current liabilities 43 CURRENT MARKET VALUE EFFECT ON CURRENT LIABILITIES STOCKS (GFS PURPOSES) 431 Current market value effect on current liabilities 4311 Effect on current non-financial liabilities 4312 Effect on current financial liabilities CLASS 5. NON-CURRENT LIABILITIES Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 51 LONG-TERM FINANCIAL LIABILITIES 511 Financial liabilities carried at amortized cost 5111 Financial domestic liabilities carried at amortized cost 5112 Financial foreign liabilities carried at amortized cost 512 Liabilities under finance lease accounted at amortized cost, current part 513 Financial liabilities carried at fair value 5131 Financial domestic liabilities carried at fair value 5132 Financial foreign liabilities carried at fair value 36 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 52 OTHER NON-CURRENT LIABILITIES 521 Non-current provisions 529 Other non-current liabilities 53 CURRENT MARKET VALUE EFFECT ON NON-CURRENT LIABILITIES STOCKS (GFS PURPOSES) 531 Current market value effect on non-current liabilities 5311 Effect on non-current non- financial liabilities 5312 Effect on non-current financial liabilities CLASS 6. REVENUE Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 61 REVENUE FROM NON- EXCHANGE TRANSACTIONS 611 Taxes 6111 Taxes on income, profits, and capital gains 6112 Taxes on payroll and workforce 6113 Taxes on property 6114 Taxes on goods and services 6115 Taxes on international trade and transactions 6119 Other taxes 612 Social contributions 6121 Social security contributions 6122 Other social contributions 613 Grants 37 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 6131 From foreign governments 6132 From international organizations 6133 From other general government units 614 Fines and penalties 615 Other non-exchange revenue 62 REVENUE FROM EXCHANGE TRANSACTIONS 621 Revenue from rendered services 622 Revenue from sale of inventories 623 Gains from disposal of non- financial assets 6231 Gains from disposal of property, plant, and equipment 6232 Gains from disposal of investment property 6233 Gains from disposal of biological assets 6234 Gains from disposal of non- produced (having natural origin) tangible assets 6235 Gains from disposal of high value assets 6236 Gains from disposal of other non-current tangible assets 6237 Gains from disposal of intangible assets 624 Revenue from disposal of financial assets 625 Gains from remeasurement of tangible assets 6251 Gains from revaluation of property, plant, and equipment 38 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 6252 Gains from re-measurement of investment property 6253 Gains from re-measurement of biological assets 6254 Gains from re-measurement of non-produced (having natural origin) tangible assets 6255 Gains from re-measurement of high value assets 6259 Gains from re-measurement of other tangible assets 626 Gains from exchange rate differences 627 Gains from re-measurement of financial instruments and impairment (uncollectability) reversal 628 Revenue from financial investment 6281 Dividends or equivalent thereof 6282 Revenue from interest at the effective interest rate 6283 Revenue from finance lease at the effective interest rate 6284 Share of the surplus or deficit of associates and joint ventures accounted for using the equity method 629 Other revenue (gains) from exchange transactions 63 OTHER GAINS 64 GAINS FOR GFS PURPOSES 641 2 Gain from current market value effects on stocks 39 CLASS 7. EXPENSES Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 71-72 1 PROGRAMME EXPENSES 711 1 General public services - cost of services 7111 1 Employee compensation 7112 1 Supplies 7113 1 Depreciation and amortization 7114 1 Repair and maintenance 7115 1 Utility expenses 7116 1 Consultancy 7117 1 Grants and subsidies 7119 1 Other 71191 1 Office supplies 71192 1 Rent 712 1 Defense - cost of services 7121 1 Employee compensation 7122 1 Supplies 7123 1 Depreciation and amortization 7124 1 Repair and maintenance 7125 1 Utility expenses 7126 1 Consultancy 7127 1 Grants and subsidies 7129 1 Other 71291 1 Office supplies 71292 1 Rent 713 1 Public order and safety - cost of services 7131 1 Employee compensation 7132 1 Supplies 7133 1 Depreciation and amortization 7134 1 Repair and maintenance 7135 1 Utility expenses 40 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 7136 1 Consultancy 7137 1 Grants and subsidies 7139 1 Other 71391 1 Office supplies 71392 1 Rent 714 1 Economic affairs - cost of services 7141 1 Employee compensation 7142 1 Supplies 7143 1 Depreciation and amortization 7144 1 Repair and maintenance 7145 1 Utility expenses 7146 1 Consultancy 7147 1 Grants and subsidies 7149 1 Other 71491 1 Office supplies 71492 1 Rent 715 1 Environmental protection - cost of services 7151 1 Employee compensation 7152 1 Supplies 7153 1 Depreciation and amortization 7154 1 Repair and maintenance 7155 1 Utility expenses 7156 1 Consultancy 7157 1 Grants and subsidies 7159 1 Other 71591 1 Office supplies 71592 1 Rent 716 1 Housing and community - cost of services 7161 1 Employee compensation 7162 1 Supplies 7163 1 Depreciation and amortization 41 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 7164 1 Repair and maintenance 7165 1 Utility expenses 7166 1 Consultancy 7167 1 Grants and subsidies 7169 1 Other 71691 1 Office supplies 71692 1 Rent 717 1 Health - cost of services 7171 1 Employee compensation 7172 1 Supplies 7173 1 Depreciation and amortization 7174 1 Repair and maintenance 7175 1 Utility expenses 7176 1 Consultancy 7177 1 Grants and subsidies 7179 1 Other 71791 1 Office supplies 71792 1 Rent 718 1 Recreation, culture and religion - cost of services 7181 1 Employee compensation 7182 1 Supplies 7183 1 Depreciation and amortization 7184 1 Repair and maintenance 7185 1 Utility expenses 7186 1 Consultancy 7187 1 Grants and subsidies 7189 1 Other 71891 1 Office supplies 71892 1 Rent 719 1 Education - cost of services 7191 1 Employee compensation 7192 1 Supplies 42 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 7193 1 Depreciation and amortization 7194 1 Repair and maintenance 7195 1 Utility expenses 7196 1 Consultancy 7197 1 Grants and subsidies 7199 1 Other 71991 1 Office supplies 71992 1 Rent 721 1 Social Protection - cost of services 7211 1 Employee compensation 7212 1 Supplies 7213 1 Depreciation and amortization 7214 1 Repair and maintenance 7215 1 Utility expenses 7216 1 Consultancy 7217 1 Grants and subsidies 7219 1 Other 72191 1 Office supplies 72192 1 Rent 73 OTHER EXPENSES AND LOSSES 731 1 Cost of the inventory sold 732 1 Expenses from disposal of non- financial assets 7321 1 Expenses from disposal of property, plant and equipment 7322 1 Expenses from disposal of investment property 7323 1 Expenses from disposal of biological assets 7324 1 Expenses from disposal of non- produced (having natural origin) tangible assets 7325 1 Expenses from disposal of high value assets 43 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 7326 1 Expenses from disposal of other non-current tangible assets 7327 1 Expenses from disposal of intangible assets 733 1 Revenue from disposal of financial asset 734 1 Losses from re-measurement of non-current tangible assets 7341 1 Losses from revaluation of property, plant and equipment 7342 1 Losses from re-measurement of investment property 7343 1 Losses from re-measurement of biological assets 7344 1 Losses from re-measurement of non-produced (having natural origin) tangible assets 7345 1 Losses from re-measurement of high value assets 7349 1 Losses from re-measurement of non-current tangible assets 735 1 Losses from exchange rate differences 736 1 Losses from remeasurement and impairment (uncollectibility) of financial instruments 737 1 Financial expenses 738 1 Income tax expenses 739 1 Other expenses 74 LOSSES FOR GFS PURPOSES 741 2 Loss from current market value effects on stocks 44 CLASS 8. COSTS Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 81 1 PRODUCTION COSTS 811 1 Direct production costs 812 1 Indirect production costs 82 1 CONSTRUCTION COSTS OF NON-CURRENT ASSETS 821 1 Construction costs of non- current assets 822 1 Subsequent costs to be capitilized into the non-current assets CLASS 9. CASH INFLOWS Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 911 CASH INFLOWS RELATED TO TAXES 9111 Taxes on income, profits, and capital gains 9112 Taxes on payroll and workforce 9113 Taxes on property 9114 Taxes on goods and services 9115 Taxes on international trade and transactions 9116 Other taxes 912 CASH INFLOWS RELATED TO SOCIAL CONTRIBUTIONS 9121 Social security contributions 9122 Other social contributions 913 CASH INFLOWS RELATED TO GRANTS 9131 From foreign governments 45 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 9132 From international organizations 9133 From other general government units 914 OTHER INFLOWS 9141 From property income 9142 From sales of goods and services 9143 From fines, penalties, and forfeits 9144 From transfers not elsewhere classified 9145 Cash inflows from other non- exchange revenue 915 CASH INLOWS RELATED TO NON-FINANCIAL ASSETS 9151 Cash inflows related to non- current non-financial assets 91511 Cash inflows related to intangible assets 91512 Outflows from biological assets 91513 High-value assets 91514 Non-produced (having natural origin) tangible assets 91515 Investment property 91516 Cash inflows related to other non-financial assets 9152 Cash inflows related to inventories 916 SETTLEMENT OR REALISATION OF FINANCIAL ASSETS 9161 Domestic financial assets 9162 External financial assets 917 INFLOWS FROM FINANCIAL LIABILITIES 9171 Domestic financial liabilities 46 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical 9172 External financial liabilities CLASS B0. BUDGETED CASH OUTFLOWS Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical B021 1 BUDGETED CASH OUTFLOWS RELATED TO COMPENSATION OF EMPLOYEES B0211 1 Wages and salaries B0212 1 Employers' social contributions B022 1 BUDGETED PAYMENT FOR PURCHASE OF GOODS AND SERVICES B0221 1 Supplies B0222 1 Repair and maintenance B0223 1 Utility expenses B0224 1 Consultancy B0225 1 Office supplies B0226 1 Rent B0227 1 Other … Same breakdown as Class 0. Cash Outflows CLASS B9. BUDGETED CASH INFLOWS Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical BUDGETED CASH INFLOWS B911 RELATED TO TAXES 47 Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical Taxes on income, profits, B9111 and capital gains Taxes on payroll and B9112 workforce B9113 Taxes on property B9114 Taxes on goods and services Taxes on international B9115 trade and transactions B9116 Other taxes BUDGETED CASH INFLOWS B912 RELATED TO SOCIAL CONTRIBUTIONS B9121 Social security contributions B9122 Other social contributions … Same breakdown as Class 9. Cash Inflows CLASS F. OFF BALANCE SHEET ACCOUNTS Group Accounts Code Code of Classifier Description Accounts I Class II Class Subanalytical F1 ASSETS NOT BELONGING TO ENTITY F11 Assets under operating lease F2 CONTINGENT ASSETS AND LIABILITIES F3 OTHER OFF-BALANCE SHEET ACCOUNTS 48