FINANCIAL REPORTING ADVISORY BOARD

Issue:

A discussion paper on accounting for PPP arrangements including PFI contracts

Impact on guidance:

To inform the development of new guidance on accounting for PPP under IFRS

IAS/IFRS adaptation?

No.

IPSAS compliant?

IPSASB is considering a draft consultation paper, which has yet to be approved.

Interpretation for the public sector context?

Yes

Impact on budgetary regime?

There will be no change to the budgetary regime itself. HMT will discuss the impact on individual budgets separately with departments.

Alignment with National Accounts

Still to be determined.

Impact on Estimates?

No, other than as related to the impact on budgets.

Conclusion in this paper:

That PPP arrangements, including PFI contracts, that fall within the scope of IFRIC 12 be recognised on the public sector grantor's balance sheet. Normally, this would mean that the operator would not recognise the infrastructure asset because the two conditions of paragraph 5 of IFRIC 12 are met from its viewpoint.

Timing:

2008-09