Because administrative institutions adopt the cash basis principle, that is, cash basis. Under the cash system, the cost will only be recorded when there is cash expenditure, regardless of whether the cost actually occurs or not. Although there is depreciation, expenses cannot be recognized without cash expenditure.
Extended data:
The new accounting system of public institutions stipulates that the fixed assets of public institutions should be depreciated except the following assets: cultural relics and exhibits; Animals and plants; Books and archives; Fixed assets measured by nominal amount.
The new system requires institutions to determine whether to accrue depreciation according to the financial rules and regulations of institutions, and stipulates an innovative treatment method of "fictitious depreciation and amortization", that is, when accruing depreciation and amortization, reducing non-current assets funds instead of counting them into expenses.
This treatment takes into account the dual needs of budget management and financial management, which does not affect the budget caliber of public institutions' expenditures, but also helps to reflect the value consumption of assets with the passage of time and the degree of use, promotes institutions to implement the asset management concept and principle of "combining physical management with value management", and provides accounting data support for public institutions to conduct internal cost accounting.