Presentation of Financial Statements in Public Financial Management within the Context of DMS-1: Conceptual Foundations and Sample Financial Statements

Abstract

In the public sector, the presentation of financial statements in a transparent, comprehensible, and standardized manner is essential for ensuring sound financial management and fiscal discipline. Accordingly, the Public Sector Accounting Standards (DMS), prepared on the basis of the International Public Sector Accounting Standards (IPSAS), were implemented in Turkey in conjunction with Law No. 5018 on Public Financial Management and Control, and these standards have been gradually enacted through their publication in the Official Gazette since 2008. DMS-1, “Presentation of Financial Statements Standard,” adopts the principle of reporting the financial position, performance, and cash flows of public administrations in a comparable and comprehensible manner consistent with international standards. Within this framework, DMS-1 regulates the requirements concerning a set of financial statements, including the statement of financial position (balance sheet), statement of financial performance (statement of results of operations), statement of changes in net assets/equity, cash flow statement, and the comparison of budgeted and actual amounts. This study has been prepared with the aim of examining the applications of DMS-1 in public administrations, taking the basic financial statements of the Ministry of Industry and Technology as a reference. The information and explanations contained in these statements are of great importance in ensuring both accountability and predictability in public sector financial management. In conclusion, DMS-1 can be regarded not only as a standard for the preparation and presentation of financial statements but also as a strategic instrument that contributes to the effective and reliable management of public resources.