Analysing Service-Level Solvency of Local Governments from Accounting Perspective: A Study of Local Governments in the Province of Yogyakarta Special Territory, Indonesia

DOI: 10.5176/2251-1997_AF14.60

Authors: Irwan Taufiq Ritonga

Abstract:

This study aims to develop measures of service-level solvency of local government from accounting perspective and to implement the measures to analyze service-level solvency of local governments in the Province of Yogyakarta Special Territory. The measures are the first instruments developed in Indonesia to measures service-level solvency of local governments using accounting information. The measures consist of total assets per capita, total equities per capita, total fixed assets per capita, total expenditures per capita; total public expenditures per capita, and total capital expenditure per capita The measures can be used as indicators to assess of how sound a local government achieves its objectives.
The analysis of service-level solvency of local governments during the period of 2010-2012 was done by using time-series and cross-sectional analysis. Results of analysis show that all local governments showed improvement trends. Kabupaten Kulon Progo was the best local government compared with other regency local governments; Kabupaten Gunungkidul demonstrated an accelerated trend compared with other regency local governments; and Kabupaten Sleman and Kabupaten Bantul showed decreasing trends compared with its compatriot.

Keywords: local government, service-level solvency