1993 SNA Update Information - AEG recommendations for issue:
Public-private partnerships (PPPs) (including buy-own-operate-transfer (BOOT) schemes) | | Issue description | | Issue description in [English] | [French] | [Russian] | [Spanish] | | Public-Private Partnerships (PPPs) are complex legal arrangements designed to share the control
and the risks and rewards of a set of fixed assets between a private enterprise and a public unit,
normally a unit of the general government sector. In most PPPs, the assets are legally owned and
used by the private enterprise to produce a specified category of services for several years, and then
the government gains operational control and legal ownership of the assets, often without payment.
The 1993 SNA treatment of operating and financial leases are not sufficient to derive an appropriate
accounting treatment for PPPs and there are no other guidelines given about PPPs There are two
major issues to be resolved. The first is to decide whether the private enterprise or the government
is the economic owner of the fixed assets. The second is to decide the appropriate recording for
transactions between the private enterprise and the public unit during the period covered by the PPP
arrangement. |
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| | AEG recommendations | | Number of AEG recommendations for selected issue: | 1 | | Corresponding meeting | Date posted | Recommendation |  | | Jan-Feb 2006 | 4/7/2006 | The AEG acknowledged John Pitzer’s contribution in advancing the work on this complex topic in the difficult situation of not having any firm international accounting standards to draw on.
(a) The AEG agreed that a description is required and the one included in the paper is satisfactory.
(b) The AEG agreed that a list of indicators would be useful. However, the AEG also agreed that it is necessary to examine specific arrangements on a case-by-case basis.
(c) The AEG acknowledged that although a general description of the issues would be useful, this issue is very complex, with the development of this type of partnership spreading rapidly and with many different variations being introduced. It was therefore proposed that the material might appear in an annex to the updated SNA. It will be noted that the annex may need updating within a relatively short time of the update being released. The ABS, ONS and IMF offered to draft text for an annex on this subject and to keep abreast of developments in international accounting standards. |
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