New PFI standard due in September

The Accounting Standards Board is said to have patched up its differences with the government over the financial reporting standard covering the private finance initiative, which is due to be published next month.

Treasury experts have consulted with the ASB as it responded to comments submitted in response to an exposure draft of amendments to FRS 5. In response to the emergence of the PFI, the ASB recommended that accountants seek to determine liability for PFI projects and show them on the relevant organisation’s balance sheet.

Ken Wild, chairman of the ASB’s public sector committee, said that contrary to some reports ‘the Treasury response was reasonably supportive’.

Many of the criticisms stemmed from explanations in the exposure draft that appeared to show income streams and cashflows as the same thing, ‘which they’re not’, explained Wild. ‘There are no major changes of principle in the new version, but changes in how they are explained.’

The new FRS 5 is basically complete, but awaits formal approval at the ASB’s September meeting, Wild added.

‘It was more or less agreed at our last meeting that we didn’t want to issue it during August,’ said Wild.