Accounting Treatment

Local Authorities are required to account for their private finance transactions in accordance with the requirements of the Finance Reporting Standard 5 - Accounting for the Substance of Transaction (FRS5) and Bidders are deemed to understand these requirements.

As part of developing the OBC for this [insert name of project], the Local Authority undertook a preliminary assessment of the PFI Reference Project against the requirements of FRS5.  That assessment demonstrated that the assets associated with the provision of the [insert details of project] would not need to be accounted for on the Local Authority's Balance Sheet.

The Local Authority will continue to review FRS5 issues and keep in close contact with the Local Authority's external auditor on this issue as the Project develops.