Making Concessions: Political, Commercial and Regulatory Tensions in Accounting for European Roads PPPs

Accounting and Business Research, Forthcoming

50 Pages Posted: 25 Mar 2010

See all articles by Anne Stafford

Anne Stafford

University of Manchester - Manchester Business School

Basilio Acerete

University of Zaragoza

Pamela Stapleton

University of Manchester - Division of Accounting and Finance

Date Written: March 17, 2010

Abstract

Governments increasingly use private finance to fund roads infrastructure. In particular the European Commission has promoted the use of public private partnerships (PPPs) to deliver the projects forming the trans-European Network. This use of private finance raises important questions about how public monies and assets are accounted for.

The paper examines firstly, accounting for roads PPPs in Spain and the UK, countries which not only have considerable experience in the use of private finance for the provision of roads, but also act as exemplars of a number of differences which may be significant from an international perspective in terms of financial reporting and economic outcomes. Secondly, it examines the tensions between national, European and international accounting pronouncements.

Our findings suggest that the business environment has influenced the development of accounting policy. In Spain a powerful toll sector presence within the legal framework has led to substantial variations, having real economic impact. In the UK, the accounting regulator has prevailed over political concerns. In Europe, conflict remains between political choice and technical accounting. Since PPP projects are on the increase across the world these findings have global relevance, as the adoption of international accounting pronouncements will not remove these conflicts.

Keywords: IFRIC 12, public private partnerships, off balance sheet accounting, public sector accounting

JEL Classification: M41

Suggested Citation

Stafford, Anne and Acerete, Basilio and Stapleton, Pam, Making Concessions: Political, Commercial and Regulatory Tensions in Accounting for European Roads PPPs (March 17, 2010). Accounting and Business Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1573496

Anne Stafford (Contact Author)

University of Manchester - Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

Basilio Acerete

University of Zaragoza ( email )

Gran Via 2
Zaragoza, 50005
Spain

Pam Stapleton

University of Manchester - Division of Accounting and Finance ( email )

Crawford House
Oxford Road
Manchester M13 9PL
United Kingdom

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