Developing a government's balance sheet—does it improve performance?

Abstract

The increasing use of accrual accounting by governments around the world has led to the appearance of public sector balance sheet information both at a wholeof-government level and at the level of an individual public sector entity. However , this new information can only be useful if it actually gets used. This article explores some of the barriers that have become evident in attempting to use balance sheet information for decision-making and accountability purposes. These barriers are not insubstantial and require acknowledgement and a reformulation of the value of balance sheet information by those promoting its benefits. Such a reformulation is suggested.

Keywords:

• Accrual accounting
• fiscal policy
• public choice theory
• public sector balance sheets
• social assets

Additional information

Notes on contributors

Ken Warren

Ken Warren is the Chief Accounting Advisor of the New Zealand Treasury and is a member of the International Public Sector Accounting Standards Board. The views expressed in this article are his own and do not necessarily reflect the views of those organizations.