(5.2)  Balance sheet treatment.

Central Government has announced that it will be moving to International Financial Reporting Standards (IFRS), which will affect the way in which PFI assets are accounted for on the balance sheet. However, these new arrangements are not yet in place, and until a further announcement is made, authorities will need to provide an "initial view" of the accounting treatment as set out in Section 2 of Technical Note No. 1 (Revised)How to Account for PFI Transactions (June 1999) available from the Treasury web site. The initial view must be supported by comments from the authority's external auditor as to whether it is reasonable. Should it appear likely during or after procurement that the initial view is likely to change, the sponsoring department should be notified immediately.