Government Partnerships comprise jointly controlled operations, assets or organizations and are distinguished from the other types of contractual arrangements that governments enter into (commonly referred to as "alternate service delivery") in having the following characteristics:
Significant common goals, both financial and non-financial Common goals are those that all partners share. When goals are mutually beneficial, but not common to both parties to the contract, the arrangement does not qualify as a Government Partnership.
• Shared control
Shared control of a Government Partnership on an equitable basis means that the partners make decisions related to the financial and operating activities of the partnership by consensus; none of the partners is in a position to exercise unilateral control.
• Shared risks and benefits
In a Government Partnership, each partner is exposed to a share of the combined risk and shares in the benefits related to the common goals of the partnership.
A Government Business Partnership is defined as a Government Partnership that has all of the following characteristics:
- it is a separate legal entity with the power to contract in its own name, that can sue and be sued
- it has been delegated the financial and operational authority to carry on a business
- it sells goods and services to individuals and organizations other than the partners as its principal activity
- it can, in the normal course of its operations, maintain itself and meet its liabilities from revenues received from sources other than the partners
Government financial statements should proportionately consolidate the financial statements of Government Partnerships, except for Government Business Partnerships.
Government Business Partnerships should be accounted for by the modified equity method applied proportionately based on the government's share of the partnership.