PracticeConsultingASB will not budge

ASB will not budge

Board refuses to compromise standards to accommodate government's PFI.

The Accounting Standards Board has vowed it will not compromise orPFI. weaken accounting standards to accommodate the government’s private finance initiative.

The ASB this week warned of the dangers of altering the rules to make allowances for the government and stressed it would fight to protect the principle of FRS5, which was introduced to halt an epidemic of financial scams in the 1980s.

‘Our aim is to prevent the re-introduction of dubious off-balance sheet schemes,’ said Sandra Thompson, the ASB’s principal projects director.

‘We will add a bit more guidance to say how FRS5 will apply to PFI. The government will have to choose whether or not it will adopt it, but it has no legal obligation to comply. We are responsible for accounts in the private sector; they will have to follow what our conclusions are.’

The comments are set to deepen the rift between the ASB and the Treasury over who remains liable for the underlying assets in PFI projects. The government is determined not to let PFI stray into the public sector borrowing requirement, arguing it is purchasing a service rather than a building and the cost should therefore remain off balance sheets.

Arthur Andersen, Deloitte & Touche, Ernst & Young and KPMG are among the firms which have supported the ASB’s guidance in principle.

‘The ASB rules must be robust; anything less would undermine the board’s achievements to date,’ said a KPMG spokesman.

‘The ASB’s standards were put in place for good reason, but firms want to achieve commercial projects through PFI. We sincerely hope a compromise can be reached,’ said Keith Stein, PFI partner at E&Y.

Paymaster General Geoffrey Robinson said he was prepared to ignore the ASB rulings if it threatened to halt PFI and public-private partnerships schemes.

‘The issue is being debated and the results of the consultation document are being looked at. We want the two sectors to work effectively and hope a solution can be found,’ added an ASB spokeswoman.

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer