4.5 FRS5 predated the development of PPP and clarification was needed of how the principles and requirements of FRS5 should apply to PPP transactions. In September 1997, HM Treasury issued interim guidance on how to account for PPP transactions as Treasury Taskforce PFI Technical Note No 1. This guidance was issued as an interim measure whilst the accounting profession developed definitive guidance on how FRS5 should be interpreted in relation to PPP transactions. The Accounting Standards Board (ASB) subsequently issued an "Amendment to FRS5" in September 1998, namely the addition of Application Note F "Private Finance Initiative and similar contracts".
4.6 The key changes introduced in the ASB guidance are regarding the separability of the contract and which variations in profits or losses should be taken into account when determining who has an asset of the property in a PPP contract.
4.7 Chapter 2 of this Section of the guidance regarding the risks which are relevant to the determination of the accounting treatment of schemes and the remainder of this chapter are prepared on the basis that the Treasury Taskforce PFI Technical Note No 1 must be used to determine the accounting treatment of PPP transactions.