Accounting for Public-Private Partnerships
Suits The C-Suite -- By Veronica R. Pore
Accounting for public-private partnerships
In order to carry out the challenge and responsibility of developing and improving public infrastructure, government intends to collaborate with the private sector through the public-private partnership (PPP) program. RELATED STORIES
Wider PPP platform available e-PhilHealth project eyed under PPP scheme
PPP projects to cost P740 billion
Stable environment promised
A PPP is an arrangement between a public (grantor) and a private (operator) party, wherein the private party assumes substantial financial, technical and operational risks in the financing, construction and operation of a piece of infrastructure for public service.
PPP arrangements are commonly seen in the development of railways, toll roads, water distribution and sanitation, power generation and distribution, port operations, as well as airports and hospitals.
For this year, government has announced the rollout of 10 priority PPP projects which include the development, financing, operation and maintenance of roads, railways and airports.
Funding for these projects involves significant amounts, and usually requires both equity and debt financing.
They also involve various stakeholders, including the government, investors, lenders and the general public.
Proper accounting for these projects, therefore, is critical.
Considerations
Beginning Jan. 1, 2008, the country adopted the Philippine Interpretation of the International Financial Reporting Interpretations Committee (IFRIC) 12 on Service Concession Arrangements.
It provides specific guidance to operators regarding accounting for public to private service concession arrangements.
Prior to 2008, these arrangements were typically accounted for under Philippine Accounting Standards (PAS) 17 on Leases, and PAS 16 on Property, Plant and Equipment.
In transitioning to IFRIC 12, accounting for assets, liabilities and related
Accounting for public-private partnerships
In order to carry out the challenge and responsibility of developing and improving public infrastructure, government intends to collaborate with the private sector through the public-private partnership (PPP) program. RELATED STORIES
Wider PPP platform available e-PhilHealth project eyed under PPP scheme
PPP projects to cost P740 billion
Stable environment promised
A PPP is an arrangement between a public (grantor) and a private (operator) party, wherein the private party assumes substantial financial, technical and operational risks in the financing, construction and operation of a piece of infrastructure for public service.
PPP arrangements are commonly seen in the development of railways, toll roads, water distribution and sanitation, power generation and distribution, port operations, as well as airports and hospitals.
For this year, government has announced the rollout of 10 priority PPP projects which include the development, financing, operation and maintenance of roads, railways and airports.
Funding for these projects involves significant amounts, and usually requires both equity and debt financing.
They also involve various stakeholders, including the government, investors, lenders and the general public.
Proper accounting for these projects, therefore, is critical.
Considerations
Beginning Jan. 1, 2008, the country adopted the Philippine Interpretation of the International Financial Reporting Interpretations Committee (IFRIC) 12 on Service Concession Arrangements.
It provides specific guidance to operators regarding accounting for public to private service concession arrangements.
Prior to 2008, these arrangements were typically accounted for under Philippine Accounting Standards (PAS) 17 on Leases, and PAS 16 on Property, Plant and Equipment.
In transitioning to IFRIC 12, accounting for assets, liabilities and related