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19 Sep 2008
The prime minister has vowed to force banks to put their off-balance sheet liabilities into their books.
Speaking to Sky News yesterday, Gordon Brown signaled that it was 'not acceptable' that banks could fail to declare bad assets and that he wanted 'all companies to bring out their bad assets and put them back on their balance sheet so the financial system can move forward'.
Banks have faced widespread criticism for the huge special vehicles they helped set up and partly supported, but which did not need to be declared on balance sheet under the accounting rules at the time.
The precise extent of risk that fell on the banks has been unclear to investors, and the IASB is working on plans to develop parallel balance sheets to show the liabilities.
The interview is to be screened on Sky News tonight.
Shadow chancellor George Osborne said: 'Gordon Brown now says he wants to " clean up" the City. He seems to forget that he is the man who, in ten years as chancellor, created the current system of regulation. For ten years he boasted about his achievements. Today he is trying to disown them.'
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Visitor comments Add your comment
The Pot calls the Kettle Black!
The Prime Minister and former Chancellor might remember that the Government has a lot of its liabilities off the Balance Sheet and has yet to adopt proper commercial accounting practices and employ CCAB qualified accountants to run its' affairs.
Posted by: Manson, 19 Sep 2008 | 00:00
Off-Balance Sheet Accounting
Does this mean that he will also record the Public Sector Pension Liability on the government Balance Sheet? This unfunded, unrecorded liability is a millstone for a generation to come.
Posted by: Danny McGreevy, 19 Sep 2008 | 00:00
One rule for one...
Presumably Gordon has forgotten about the long history of leaving those rather large PFI obligations "off balance sheet". Since a new spirit of openness is to pervade financial disclosure, all those commitments will appear in the government books forthwith
Posted by: Ed Long, 19 Sep 2008 | 00:00
Off-balance-sheet accounting
I hope Gordon Brown makes sure that various dubious of-balance-sheet accounting practices are given up by the Treasury. that would include PFI projects, of course.
Posted by: Julian Cohen, 19 Sep 2008 | 00:00
And the Government's off-balance debt?
I presume Brown will be applying the same principle to the Government's liabilities under PFI, PPP etc?
And public sector pension liability?
Thought so.
Posted by: Duncan, 19 Sep 2008 | 00:00
Government's off-balance sheet deals
Does this also mean that "Mr Prudence" will get the Government to put all its off-balance sheet deals back onto its balance sheet?
Posted by: j stephany, 19 Sep 2008 | 00:00
Pushing the brown envelope
So what happened to the legal requirement for a 'True & Fair view' or Fairly presented?
This overiding rule was meant to trump any accounting standard or rule. I wasn't aware it was optional.
Why were big firms pushing for limited liability a while ago now?
Can anyone explain the rationale for PFI in the public sector in the light of the above and which chancellors pursued this option?
Admittedly HMG is not a company, so all within the law then?
Posted by: Substance over form, 19 Sep 2008 | 00:00
PCKB
Perhaps the Government could put its own house in order first and bring its own off-balance sheet funding, AKA PFI, into the accounts properly. I really don't think Mr Brown has the moral high ground on this one.
Posted by: Jeremy Newman, 19 Sep 2008 | 00:00
PFI
Isn't this the man who put (or rather didn't) off balance sheet financing into the Government' own accounting.
Posted by: Richard James, 19 Sep 2008 | 00:00
Off Balance Sheet
What about Government and PFI and HMRC and Mapely?
Posted by: Jack Harper, 19 Sep 2008 | 00:00
The Pot calls the Kettle Black!
The Prime Minister and former Chancellor might remember that the Government has a lot of its liabilities off the Balance Sheet and has yet to adopt proper commercial accounting practices and employ CCAB qualified accountants to run its' affairs.
Posted by: Manson, 19 Sep 2008 | 00:00
Amazing
And then Alice jumped through the looking glass....
I had always assumed that Gordon Brown lived in a make believe world, but he clearly has lost all connection with reality on this one.
The truly scary prospect is that he actually does not understand the irony* We do not need someone so detached from the world we all inhabit as our leader at this moment.
*For definition of 'irony' in this case please see 'tragedy'
Posted by: Edward Gorringe, 19 Sep 2008 | 00:00
Sauce for the Gander
Fine for the Chancellor to end 'off-balance sheet accounting ', a good move to increase transparency.
I suggest he does the same for the public sector even though the news would be very worrying.
Posted by: John Pope, 22 Sep 2008 | 00:00