Based on the article “Challenges of Accrual Accounting
Implementation in Malaysian Accountant General’s Department” (Nurul
Nadiah,Santer, Saiyidah,Muhamad Hadi, 2015) Accrual accounting is an accounting
philosophy under which exchanges are perceived as the basic occasion happens,
paying little heed to the planning of the related money receipts and instalments
to be made. Accrual accounting will record the transaction when the revenue is
earned and when the expenses is incurred. The purpose of being migration to the
accrual accounting is to become a high-income nation. Dato’ Sri Najib Tun Razak
was highlighted in his speech that “We need a government that enables and empowers
the private sector. This means re-shaping and energizing the public sector to
be more responsive and accountable to the needs of private citizens and

            The initiative
of implement an accrual accounting is to facilitate asset-liability management.
The International Public Sector Accounting Standards Board (IPSASB), which is
under the Federation of Accountant (IFAC), is accountable in developing International
Public Sector Accounting Standards (IPSAS). Malaysia is in the process of becoming
part of developed countries and assuming that the accrual accounting will be used
in five years. Basically, there are advantages for developing accrual
accounting especially for public sector in Malaysia. One of the preferred
standpoint is the administration can without much of a stretch access to
precise data with the end goal of responsibility. Executing the gathering
bookkeeping is required to help and energize the nature of data that will
utilized for basic leadership. Moreover, it helps in enhancing execution
administration, money related straightforwardness and responsibility out in the
open associations.

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             However, there are a lot of challenges that public
sector need to face in order to implement accrual accounting. The difficulties
are comprise of the need to concentrate on mindfulness, administrative
structures, building limit, competency and coordinating frameworks for the
general population workers as to encourage by utilizing gathering accrual
accounting. In order to realising these accrual accounting, the management need
to support their servant by encourage them with training program provided so
that they can improve their skills and knowledge align with the objective of implementing
accrual accounting. Accrual accounting is unlike cash basis in term of the
receivables and payables where there is no receivables and payables recorded on
cash basis while there is receivables and payables recorded on accrual basis. Receivables
and payables when payment is not received on sales and in time of purchase.

            Nevertheless, insufficient
data on financial details lead to the developing new basis of accounting which
is accrual accounting. The complete document is essential for constructing
charts of money owed and establishing balance sheet.