Resource accounting: Valuation consolidation and accounting regulation

This contribution to the symposium examines, initially, the appropriate capital maintenance concepts for accruals-based government accounts, attention then naturally turning to the principles on which assets and liabilities ought to be valued. The focus then moves to the extent of consolidation under RA, leading to rejections of the (different) departmental boundary as proposed in the Green and White Papers (Treasury 1994a, 1995a). Consideration is given to private sector experience concerning the specification of which organizations should be consolidated, to ensure that financial reporting is focused upon relevant economic entities. Next, the design of accounting regulation - notably, who sets accounting standards and monitors their enforcement - is shown to be fundamental to the acceptability of the Treasury's proposals. The concluding section draws the argument together.