Working Party on National
Accounts, 11-14 October 2005
Canberra II Group
Public-Private Partnerships
11 September 2005
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Public-Private Partnerships
Brett Kaufmann, Robin Lynch,
Christoph Maier, and John Pitzer
11 September 2005
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Conclusions from Canberra II
meeting in April, 2005
• Public-Private Partnerships (PPPs) have
become sufficiently important that they
should be mentioned in the SNA.
• There are two major problems to solve.
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First Problem
• Is the private unit or the public unit the
economic owner of the fixed assets
acquired for use in the PPP?
• The private unit is the legal owner and
user of the assets in its production. The
public unit often has a substantial residual
interest and can prescribe the design,
quality, capacity, maintenance, etc. of the
assets.
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First Problem (2)
• Several proposals on the risks and
rewards that should be considered and
their importance.
• We did not reach a decision about how to
decide which unit is the economic owner
of the assets.
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Second Problem
• Depending on which unit is the economic
owner and other terms of the PPP
contract, there are several difficult
accounting decisions, possibly involving
imputing leases and other transactions.
• We did not reach a decision about how
any of these specialized situations should
be treated.
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Accounting Standards
• The Interpretations Committee (IFRIC) of
the International Accounting Standards
Board is developing financial accounting
standards for PPPs concurrently with the
Canberra Group.
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Accounting Standards (2)
• The complexity of PPPs and the
dependence of national accountants on
government financial accounting data
makes it highly desirable to have a
common treatment of PPPs in the SNA
and in the accounting standards.
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Accounting Standards (3)
• IFRIC has not reached a decision about
either major PPP problem.
• The disagreement is sufficiently sharp that
the project may be referred to the parent
International Accounting Standards Board.
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Recommendations
1. A description of PPPs and the general
principles for their accounting treatment
should be added to the SNA.
This recommendation is not as trivial as
it appears.
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Recommendations (2)
2. Determine the economic owner using the
same principles as for any other asset.
Statistical offices may not have the
resources to evaluate each PPP.
Recognize dependence on financial
accountants, but be sure SNA principles
are followed.
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Recommendations (3)
3. Discuss the types of risks and rewards
(or control) likely to be relevant when
deciding economic ownership.
Each contract is different.
There are no general rules.
However, SNA should provide a list of
indicative criteria for assessing risk.
Subject of written consultation.
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Recommendations (4)
4. Evaluate IASB/IFRIC standards for
consistency with SNA principles.
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Recommendations (5)
5. Detailed rules for the transactions
resulting from a PPP are not possible.
Consider all of the facts and
circumstances.
Use a treatment that brings out the
underlying economic relationships.
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Recommendations (6)
6. The appropriate accounting treatment
needs to reflect a government’s residual
interest in assets owned by the private
unit, the acquisition of operational assets
taken into use by a government as
economic owner and the measurement
of production.
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