Accounting choices: technical and political trade‐offs and the UK’s private finance initiative
Accounting, Auditing & Accountability Journal
ISSN: 0951-3574
Article publication date: 1 December 2002
Abstract
The Private Finance Initiative (PFI) is designed to introduce new resources into the national infrastructure. It introduces the idea that the public sector can provide services by purchasing them from the private sector rather than by direct provision. There have been considerable disagreements about how to account for these transactions. Key in this has been differences of view as to whether PFI transactions involve purchase of assets and thus whether the transaction should appear on the balance‐sheets of the public sector. This seemingly technical question has generated considerable debate and disagreements between the UK government and the Accounting Standards Board (ASB). Closer investigation into this disagreement demonstrates a range of alternative views and tensions. Describes and analyses these different views and the inter‐ and intra‐relationships and tensions between these parties using an interests‐based, political framework for this contextual analysis. Demonstrates how accounting standard setting, in cases such as accounting for PFI, if only analysed at the technical level, misses a range of social dynamics that are central to understanding the role of accounting in the development of society.
Keywords
Citation
Broadbent, J. and Laughlin, R. (2002), "Accounting choices: technical and political trade‐offs and the UK’s private finance initiative", Accounting, Auditing & Accountability Journal, Vol. 15 No. 5, pp. 622-654. https://doi.org/10.1108/09513570210448948
Publisher
:MCB UP Ltd
Copyright © 2002, MCB UP Limited