Resource Accounting: Valuation, consolidation and accounting regulation

This contribution to the symposium examines, initially, the appropriate capital
maintenance concepts for accruals-based government accounts, attention then
naturally turning to the principles on which assets and liabilities ought to be
valued. The focus then moves to the extent of consolidation under RA, leading to
rejections of the (different) departmental boundary as proposed in the Green and
White Papers (Treasury 1994a, 1995a). Consideration is given to private sector
experience concerning the specification of which organizations should be
consolidated, to ensure that financial reporting is focused upon relevant
economic entities. Next, the design of accounting regulation - notably, who sets
accounting standards and monitors their enforcement - is shown to be
fundamental to the acceptability of the Treasury’s proposals. The concluding
section draws the argument together.