Local government accounting in Portugal has changed significantly over the past five years bringing local government accounting closer to business accounting.
The previous system was basically cash-based and budget-oriented; now cash-based budgeting is used with accrual-based financial and cost accounting, using
double-entry in order to provide more useful information for decision-making. In this article, the authors show how the new accounting and budgeting system can
lead to misinterpretations of an organization’s economic and financial situation.