1.7 78 per cent of the MOD PFI projects by number (62 per cent by capital value) have been accounted for off the Department's balance sheet. Across central government as a whole, we have considered that most PFI projects, predominantly government buildings, should be on balance sheet because departments have the risks and rewards of ownership. The MOD's PFI portfolio, however, includes a range of other projects including a number of training and information technology (IT) projects. Most of these projects have been accounted for by the Department off balance sheet because the risks and rewards of ownership lie with the private sector contractors. For example, in training projects the contractors' remuneration often varies in relation to the volume of staff using the training or the success of the training.
1.8 Central government will implement International Financial Reporting Standards (IFRS) from 1 April 2009. It is likely that when these new accounting rules are introduced, each project will undergo a fresh detailed assessment of its accounting treatment. As the assessment criteria will be different from those used when the projects were first assessed, it is possible that some contracts currently categorised as off balance sheet may come on to the Department's balance sheet.