In governmental accounting, at what point are expenses recognized?

In governmental accounting, expenses are recognized when the service is rendered. This aligns with the accrual basis of accounting, which is widely used in governmental accounting. Under this basis, expenses are recorded when they are incurred, regardless of when the cash payment is made. This means that as soon as a service is provided or a good is received, it is recognized as an expense in the financial records.

This principle allows for a more accurate reflection of a government's financial position and performance by matching expenses to the revenues they help generate within the same period. This method is crucial for governments in establishing accountability and transparency in their financial reporting. Recognizing expenses at the point of service delivery helps provide a clearer picture of the resources consumed and the costs associated with the government's operations, which can be critical for stakeholders assessing the effectiveness and efficiency of governmental programs and services.