Revenue Recognition: Under the modified accrual basis of accounting, revenue is recognized when it is earned, but only when cash is received or when a receivable is created. This differs from the full accrual basis, under which revenue is recognized when it is earned, regardless of whether cash has been received.
Expense Recognition: Under the modified accrual basis, expenses are recognized when they are incurred, but only when cash is paid or when a payable is created. This differs from the full accrual basis, under which expenses are recognized when they are incurred, regardless of whether cash has been paid.
Fixed Assets: Under the modified accrual basis, fixed assets are recorded at their historical cost and are not depreciated. This differs from the full accrual basis, under which fixed assets are recorded at their historical cost and are depreciated over their useful lives.
Long-Term Debt: Under the modified accrual basis, long-term debt is recorded at its face value and is not amortized. This differs from the full accrual basis, under which long-term debt is recorded at its present value and is amortized over its term.
Reporting: Under the modified accrual basis, the government typically reports its financial statements on a cash basis, meaning that only actual cash receipts and disbursements are reported. This differs from the full accrual basis, under which the government reports its financial statements on an accrual basis, meaning that all revenues and expenses are recorded when they are earned or incurred, regardless of whether cash has been received or paid.
Overall, the modified accrual basis of accounting is less comprehensive than the full accrual basis and focuses primarily on tracking cash flow. On the other hand, the full accrual basis provides a more complete picture of the government's financial position and results of operations by recording all revenues and expenses when they are earned or incurred, even if cash has not yet been received or paid.