NEWS: PPP risks disclosed in new accounting standards
July 25, 2017
The costs, benefits and risks of infrastructure and other public service projects will be more transparently and consistently reported to taxpayers under a new Australian accounting standard released today.
Public sector entities will soon be required to recognise assets and liabilities that relate to their public private partnerships (PPPs), following the release of Australian accounting standard, AASB 1059 Service Concession Arrangements: Grantors.
Also known as ‘service concession arrangements’, PPPs are partnerships that public sector entities enter into with the private sector to deliver public services. Typically, these partnerships involve the construction and management of assets that form part of infrastructure projects such as toll roads, hospitals and schools.
Infrastructure projects are a significant part of government budgets, with spending making up approximately $20 billion in 2016.
In addition, more disclosures will be made around the terms of PPP arrangements, giving taxpayers a greater understanding of the risks associated with such projects.
AASB 1059 Service Concession Arrangements: Grantors will apply to reporting periods on or after 1 January 2019. The standard is available here.
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