Double-entry accounting

A new municipal budget law was introduced in the state of Rhineland-Palatinate on January 1, 2007 (or with an option on January 1, 2009). (= municipal double-entry accounting in Rhineland-Palatinate)

This new commercial accounting system is a three-component system. The previous division into administrative and capital budgets is replaced by three pillars:

• Statement of assets (balance sheet)
  
• Profit plan or income statement
  
• Financial plan or financial statement
  

The previous terms income and expenditure are replaced by the terms income (= income statement) and receipts (= cash flow statement) or expenses (= income statement) and payments (= cash flow statement).

The new budget will be product-oriented in future.

Statement of assets and liabilities (balance sheet)

The statement of assets and liabilities must show the total valued assets of the municipality and the origin of the funds required for this purpose.

Profit plan/profit and loss account

The profit plan shows all expenses and income for a period. In principle, it corresponds to the commercial profit and loss account. The result changes equity as profit or loss (shown in the statement of assets).

Financial plan/financial statement

All incoming and outgoing payments for a period are shown in the financial plan. The result has an impact on the balance sheet item "Cash and cash equivalents".

The municipal umbrella organizations have compiled extensive information on municipal double-entry accounting in a joint project.