Why Toronto should transition to a new ‘cash allocation basis’ of accounting for budgets

For an example of the application of the ‘cash allocation basis’, see the companion article <a href="https://medium.com/@henrikbechmann/example-the-city-of-toronto-2023-budget-using-the-cash-allocation-basis-of-budget-accounting-683e8b53b0c4" rel="noopener">Example: The City of Toronto 2023 budget using the ‘cash allocation basis’ of budget accounting</a>. The new ‘cash allocation basis’ of budget accounting would allocate cash to three basic groupings: external revenue allocations, external expense allocations, and internal capital allocations (internal cash transfers). The current ‘modified cash basis’ allocates cash to only two basic groupings: revenue allocations and expenditure allocations. This causes conflations and distortions. Let me explain. <a href="https://medium.com/@henrikbechmann/why-toronto-should-transition-to-a-new-cash-allocation-basis-of-accounting-for-budgets-3968feab5998">Read More</a>