A key factor to improve the financial accountability of governments is the existence of a set of generally accepted financial reporting of standards, such as IPSAS issued by the IFAC, which seek to enhance information transparency. This paper examines the capability of fair value accounting to improve, through financial transparency, government accountability, analysing the possible effect of the implementation of this measurement basis on understandability, comparability and timeliness—three qualitative characteristics linked to the relevance of financial reporting. This paper further considers whether the difficulties involved in achieving FV estimations could affect government financial accountability. The findings indicate that FVA implementation could enhance accountability by improving understandability, comparability and timeliness in governmental financial reporting, although the use of objective measures to estimate the FV of assets is fundamental. In addition, the type of assets and the existence of an active market are crucial to improving the comparability of financial statements under FVA, whereas improving timeliness could be limited by the possibility of estimating FV measures in-house.

A major responsibility of governments worldwide is to maintain and upgrade state-owned physical infrastructure. Yet contemporary accounting reports fail to recognize commitments arising from deferred maintenance, and the usefulness of descriptions of book values and depreciation charges on those assets is questionable. A range of options for reporting more fully on infrastructure assets has been proposed but little evidence has been presented as to how stakeholders view alternative forms of information obtained in terms of those options. This study presents evidence obtained from telephone and mail surveys about the attitudes of engineers, accounting and finance professionals and other senior managers of Australian public sector agencies towards current infrastructure reporting practices. Most of the surveyed agencies actively managed their infrastructure assets and routinely compiled information about asset condition. The majority of respondents indicated that maintaining the functionality of physical infrastructure was critical to the success of their organization. Against this background, respondents were asked to indicate which among five nominated reporting options was likely to better aid judgments about a series of issues concerning the status and management of infrastructure, and finally what reporting option had the most overall usefulness to decision making. The judgments identified were likely to be common to both managers and external stakeholders. The findings were that respondents, irrespective of their organizational affiliation or professional background, overwhelmingly preferred information about the physical condition of assets, combined with estimates of the current cost of bringing those assets to a satisfactory condition (with some respondents indicating a preference for the data to be accompanied by information about written-down replacement costs). Historical cost accounting received little support from respondents.

In May 2008, the Australian government presented its budget to parliament solely in terms of the IMF Government Finance Statistics (GFS) accounting system; and in December 2008 it announced that all outcome financial statements were also to be GFS based.

The U.K. Whole of Government Account (WGA) has been conceived by the Treasury as having a macro-fiscal role. This WGA is about fiscal transparency at the aggregate level, rather than at a more disaggregated level with regard to public sector decision makers at tiers of government, each with their own chain of accountability. This paper analyses the U.K. conception of the WGA, examining its theoretical background and evolution since the 1995 decision to convert central government accounting from cash to accruals. The definition of the area of consolidation is governed by statute, the declared intention being to align as far as possible with the national accounts definitions that provide the basis for fiscal aggregates, thereby overriding IAS 27. Net liabilities per WGA is mapped in this paper to macro-fiscal aggregates, including public sector net debt (the U.K. preferred measure), general government gross debt (the EU preferred measure) and public sector net worth (national accounts). Conceptually, the WGA measure is situated between net debt (against which only liquid assets are netted) and the long-term cash projections developed by the Treasury. Insights are provided into the damage inflicted on U.K. public finances by a period of over-optimism about fiscal performance and the economy's heavy exposure to the global financial crisis. Fiscal retrenchment in all countries can have a substantial illusory component, as proposals may reduce some measures of deficit and debt at the expense of the public sector balance sheet, to which the WGA draws attention. These measures may include: privatizing state assets; neglecting existing public sector assets; cutting public sector capital expenditure; substituting public–private partnerships for conventional procurement; and posting bills to the future. The U.K. WGA may also institutionalize some protection against accounting arbitrage that distorts policy choices and fiscal reporting. Well-documented reconciliations between figures derived from national accounts and from IFRS-based financial reporting are therefore imperative for fiscal transparency.

Issues that have arisen in the preparation of public sector consolidated statements are identified by reference to audit qualifications, by noting items recognized (or not recognized) in different reports, and by consideration of items or treatments that are peculiar to the public sector. Australian governments have agreed to align government financial reports with local interpretations of Government Finance Statistics, and this has secured some standardization of reporting. Suggestions are offered as to how reporting issues might be resolved, by reference to decisions routinely made by stakeholders. Proposals relate to asset and liability identification, the disclosure of details of inter-sector transfers, the disaggregation of reports on expenditure in terms of both line items and policy areas of government; and that these reports be accompanied by performance indicators relating to policy areas.

The purpose of accruals-based whole of government (WGA) financial reports has been the subject of international debate. Heald and Georgiou (2011) note the U.K.'s emphasis on a macro-fiscal policy role for WGA and hope that, in addition to facilitating review of fiscal targets, WGA will also help to correct a narrow focus on net debt by providing information about assets and liabilities other than those included in the net debt measure. They also hope that WGA will reveal asset portfolio changes resulting from privatizations. Heald and Georgiou had available only very limited data about the as-yet-unpublished U.K. WGA, and proposed that data from countries with a longer history of published accruals-based WGA may help to understand the usefulness of WGA. In 1992 New Zealand's government became the first sovereign government to publish accruals-based financial reports for the whole of the central government. This article presents New Zealand's summarized WGA from 1993 to 2010. It identifies the changing mix of assets and liabilities, the tendency for complex WGA financial reports to obscure, rather than to reveal, portfolio changes resulting from privatization, and the growing involvement in financial market activities.

The article offers an overview of the modernization of the European Commission (EC) accounting system. It represents an integral part of an overall rationalization of the EC organizational, administrative and financial dimensions which has been carried out over the last decade. The reformed accounting system is a dual one: it is based both on cash accounting, to manage budget appropriations, and on accrual accounting, to draw up the financial statements.