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A bridge too far: a common conceptual framework for commercial and public benefit entities

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  • Sheila Ellwood
  • Sue Newbury

Abstract

Writers and standard setters have propounded the adoption of private sector frameworks for the public sector. Ellwood (2003) examined the apparent ‘bridge’ between and across the sectors provided by UK GAAP and concluded that much work needed to be undertaken on the theoretical underpinning of Whole of Government Accounts, but WGA is progressing presuming the commercial model. There has been recent debate in the Antipodes as to whether conceptual frameworks can be common for the private and the public and not-for-profit sectors or whether such claimed commonality is a sham (Newberry, 2002). In the UK. the Accounting Standards Board (ASB) has produced a reinterpretation of the Statement of Principles for public benefit entities. This paper investigates the proposed Statement of Principles for public benefit entities (SoPpbe). There appears to be an inherent unsuitability of the current private sector framework for transference to ‘public benefit entities’. The balance sheet focus and the assumed objective of wealth creation are incomprehensible in a public or not-for-profit context. Changes in public service management embodied within New Public Management (NPM) led to the ascendancy of accruals accounting but this does not necessarily permit the adoption of a (reinterpreted) private sector conceptual framework. It is concluded that the differences are so fundamental that it is misleading to claim the adoption of a common bridging framework and it is misguided to struggle to achieve one. The differences will always make such an endeavour ‘a bridge too far’.

Suggested Citation

  • Sheila Ellwood & Sue Newbury, 2006. "A bridge too far: a common conceptual framework for commercial and public benefit entities," Accounting and Business Research, Taylor & Francis Journals, vol. 36(1), pages 19-32.
    • Handle: RePEc:taf:acctbr:v:36:y:2006:i:1:p:19-32
    DOI: 10.1080/00014788.2006.9730004
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    2. Anita Golovkova, 2020. "IFRS implementation in healthcare facilities in the United Kingdom: (un)intended effects [Implementace IFRS ve zdravotnických zařízeních ve Velké Británii – (ne)zamyšlené dopady]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2020(3-4).
    3. Zubir Azhar & Ervina Alfan & Krishnen Kishan & Nurul Husna Assanah, 2022. "Accrual Accounting at Different Levels of the Public Sector: A Systematic Literature Review," Australian Accounting Review, CPA Australia, vol. 32(1), pages 36-62, March.
    4. Ellwood, Sheila & Greenwood, Margaret, 2016. "Accounting for heritage assets: Does measuring economic value ‘kill the cat’?," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 38(C), pages 1-13.
    5. Ralph Kober & Janet Lee & Juliana Ng, 2013. "GAAP, GFS and AASB 1049: perceptions of public sector stakeholders," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 53(2), pages 471-496, June.
    6. Janet Mack & Gareth G. Morgan & Oonagh B. Breen & Carolyn J. Cordery, 2017. "Financial reporting by charities: a matched case study analysis from four countries," Public Money & Management, Taylor & Francis Journals, vol. 37(3), pages 165-172, April.
    7. Ralph Kober & Janet Lee & Juliana Ng, 2021. "Australian not‐for‐profit sector views on the conceptual framework, accounting standards and accounting information," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(1), pages 1105-1138, March.
    8. Sheila Ellwood & Susan Newberry, 2016. "New development: The conceptual underpinnings of international public sector accounting," Public Money & Management, Taylor & Francis Journals, vol. 36(3), pages 231-234, April.
    9. Anita Golovkova, 2020. "IFRS implementation in healthcare facilities in the United Kingdom: (un)intended effects [Implementace IFRS ve zdravotnických zařízeních ve Velké Británii - (ne)zamyšlené dopady]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2020(3-4), pages 53-70.

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