The International Public Sector Accounting Standards Board has proposed a set of standards for service concession arrangements that governments establish with private businesses.
The board, which operates under the auspices of the International Federation of Accountants, has proposed an exposure draft on accounting standards for such arrangements from the grantors perspective. Service concession arrangements, often called public-private partnerships, involve an operator providing services to the public on behalf of a grantorusually the government or another public sector entity.
For many countries, such arrangements are a means to ensure that large-scale infrastructure projects such as the building of roads, airports, tunnels, bridges, prisons, hospitals, water distribution facilities, energy supply and telecommunication networks, and military installations can be developed and provided to the public for use. However, in some cases, they are not recognized in the financial statements, effectively concealing the financial position of the grantor.
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"The use of service concession arrangements as a means for the public sector to build and improve public services has increased dramatically in recent years, said IPSASB Chair Andreas Bergmann in a statement. This increase in volume, coupled with the lack of an international standard for grantors in such arrangements, made action in this area of critical importance for the financial stability of governments.
To access the exposure draft or submit a comment, visit
