Call to clear up PFI confusion

Companies working on private finance initiatives have urged the body charged
with issuing interpretations of international accounting standards to provide
clear direction on PFI deals as soon as possible.

IFRIC, the IASB’s interpretative arm, closed an extended consultation on PFI
accounting at the end of May but has been struggling to issue final
interpretations for PFI projects, causing growing concern among companies that
they will have no definitive guidance on how to prepare their accounts for PFI

‘We have taken longer over this than we had hoped,’ said Ken Wild, technical
partner at Deloitte and an IFRIC member. ‘IFRIC has received a lot of criticism
that its interpretations are not perfect. The message we are getting is that we
need to get something out quickly or companies will be left dreadfully adrift.’

IFRIC’s next meeting will take place at the beginning of August, where PFI
companies will be hoping to receive clear guidance.

Wild said it was crucial for IFRIC to provide a clear signal on its direction
after this meeting. ‘We need to get in a huddle and clearly flag what we are
doing and keep in touch so that companies know where we are going,’ Wild said.
‘It will be no help if guidance is continually changing.’

Uncertainty could see companies adopt disparate, chaotic methods for PFI
accounting. Some groups may stick to UK GAAP treatments until IFRIC finalises
its plans, while others could follow initial.

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