Public Heritage Assets
Accounting for public heritage facilities – assets or liabilities of the government?
The Authors
Allan D. Barton, Department of Commerce, Faculty of Economics and Commerce, Australian National University, Canberra, Australia
Acknowledgements
The author wishes to thank three anonymous referees for their constructive comments on earlier drafts of the paper.
Abstract
Public heritage facilities – national parks, art galleries, museums and so on – are now required by professional accounting standards in Australia to be valued and included in government general purpose financial statements as assets. This study challenges the appropriateness of such an accounting treatment in relation to the SAC4 definition of assets and the purported usefulness of the information. Instead it is argued that these facilities are public goods, and that commercial accounting principles should not be applied to them. The article explains the nature and significance of public goods and how they differ from private goods. It explains why commercial accounting principles are irrelevant for public heritage facilities because their objectives are social rather than financial and why commercial valuations are irrelevant and unreliable if applied to them. Finally, it is contended that the facilities are assets held in trust for the nation by government and hence should not be included in its general purpose financial reports.
Article Type:
Conceptual Paper
Keyword(s):
Public sector accounting; Public and private goods; Public finance.
Journal:
Accounting, Auditing & Accountability Journal
Volume:
13
Number:
2
Year:
2000
pp:
219-236
Copyright ©
MCB UP Ltd
ISSN:
0951-3574
I. Introduction
Some years ago, Professor R.K. Mautz (1988) made a controversial claim that the Washington Monument should not be included as an asset in any balance sheet of the US Government. Rather, he claimed the Monument is a liability. His surprised
The Authors
Allan D. Barton, Department of Commerce, Faculty of Economics and Commerce, Australian National University, Canberra, Australia
Acknowledgements
The author wishes to thank three anonymous referees for their constructive comments on earlier drafts of the paper.
Abstract
Public heritage facilities – national parks, art galleries, museums and so on – are now required by professional accounting standards in Australia to be valued and included in government general purpose financial statements as assets. This study challenges the appropriateness of such an accounting treatment in relation to the SAC4 definition of assets and the purported usefulness of the information. Instead it is argued that these facilities are public goods, and that commercial accounting principles should not be applied to them. The article explains the nature and significance of public goods and how they differ from private goods. It explains why commercial accounting principles are irrelevant for public heritage facilities because their objectives are social rather than financial and why commercial valuations are irrelevant and unreliable if applied to them. Finally, it is contended that the facilities are assets held in trust for the nation by government and hence should not be included in its general purpose financial reports.
Article Type:
Conceptual Paper
Keyword(s):
Public sector accounting; Public and private goods; Public finance.
Journal:
Accounting, Auditing & Accountability Journal
Volume:
13
Number:
2
Year:
2000
pp:
219-236
Copyright ©
MCB UP Ltd
ISSN:
0951-3574
I. Introduction
Some years ago, Professor R.K. Mautz (1988) made a controversial claim that the Washington Monument should not be included as an asset in any balance sheet of the US Government. Rather, he claimed the Monument is a liability. His surprised