{"id":10964,"date":"2011-07-11T09:33:14","date_gmt":"2011-07-11T08:33:14","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=10964"},"modified":"2011-07-11T08:01:59","modified_gmt":"2011-07-11T07:01:59","slug":"why-will-the-government-be-issuing-accounts-under-new-and-wholly-inappropriate-rules-this-week","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2011\/07\/11\/why-will-the-government-be-issuing-accounts-under-new-and-wholly-inappropriate-rules-this-week\/","title":{"rendered":"Why will the government be issuing accounts under new and wholly inappropriate rules this week?"},"content":{"rendered":"

As the FT notes<\/a>:<\/p>\n

Hundreds of billions of pounds of additional debt will appear on the government\u2019s books on Wednesday when the\u00a0Treasury publishes accounts<\/a> drawn up on the same basis as those of companies.<\/p>\n

After years of delay, the government will give the first glimpse of what the UK\u2019s public finances would look like if the UK were a listed company such as Marks & Spencer or BT.<\/p><\/blockquote>\n

\n

The\u00a0continue:<\/span><\/span><\/h3>\n<\/div>\n

The new accounting standards have required the government to consolidate information from 1,500 public bodies, and report figures using the\u00a0International Financial Reporting Standards<\/a> followed by big businesses.<\/p><\/blockquote>\n

But why\u00a0should\u00a0the\u00a0government\u00a0do this? The\u00a0International Accounting Standards Board who are responsible for\u00a0International Financial Reporting Standard are currently reforming their constitution. In the\u00a0consultation\u00a0document\u00a0on this reform<\/a> they say:<\/p>\n

In carrying out the IFRS Foundation\u2019s mission as the standard-setting body, the IASB should develop financial reporting standards that provide a faithful presentation of an entity\u2019s financial position and performance. \u00a0Those standards should serve investors and other market participants in their economic and resource allocation decisions. \u00a0The confidence of all users of financial statements in the transparency and \u00a0integrity of financial \u00a0reporting is critically important to the effective functioning of capital markets, efficient capital allocation, global financial stability and sound economic growth.<\/p><\/blockquote>\n

I discuss this in more depth here<\/a>, but the key point is a simple one: nothing in the way\u00a0International Financial Reporting Standard are developed makes them suitable for use by\u00a0government.<\/p>\n

They are designed for reporting by a body whose\u00a0capital is traded on a market for the use of those who undertake short term\u00a0speculative\u00a0trading.\u00a0According\u00a0to the\u00a0International Accounting Standards Board they have no other purpose. But this is far, far removed from the role and\u00a0structure\u00a0of\u00a0government. That means IFRS are wholly inappropriate for its use and will lead to but economic decision making and inappropriate allocation of resources.<\/span><\/p>\n

It's another mistake resulting from the ethos that thinks the UK is a PLC. It isn't. And it's about time we realised that fact.<\/p>\n","protected":false},"excerpt":{"rendered":"

As the FT notes: Hundreds of billions of pounds of additional debt will appear on the government\u2019s books on Wednesday when the\u00a0Treasury publishes accounts drawn
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26],"tags":[],"class_list":["post-10964","post","type-post","status-publish","format-standard","hentry","category-accounting"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/10964","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=10964"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/10964\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=10964"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=10964"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=10964"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}