PFI accounting standards 'to cause tension'

News Article - 06 March 2008
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Government departments are expected to end up in opposition over accounting standards for private finance initiative projects.

The Treasury continues to back PFI, but other government agencies, such as the Office for National Statistics (ONS), are likely to resist changes.

If the government switches to IFRS (International Financial Reporting Standards) for PFI projects, around £30 billion worth of off-balance-sheet debt from PFI projects would be brought onto the government books, Accountancy Age claims.

According to the Financial Times, bringing PFI debts onto the books would breach government borrowing rules.

Alistair Darling has previously criticised off-balance sheet debts, but the government is expected to alter IFRS rules in order to keep private debts off balance sheet and avoid hefty capital charges.

A number of government departments are expected to miss an IFRS deadline of April 1st to adjust their accounting standards.

Companies operating PFI projects are advised to invest in good accounting software to ensure that they manage their reporting effectively.

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