Accounting for government guarantees: perspectives on fiscal transparency from four modes of accounting

Heald, D. and Hodges, R. (2018) Accounting for government guarantees: perspectives on fiscal transparency from four modes of accounting. Accounting and Business Research, 48(7), pp. 782-804. (doi: 10.1080/00014788.2018.1428525)

154678.pdf - Published Version
Available under License Creative Commons Attribution Non-commercial No Derivatives.



Government guarantees are increasingly important as a policy instrument in public infrastructure investment and to assist the banking and financial sectors following the global financial crisis. This paper analyses how different modes of accounting characterize such guarantees in the contexts of public sector financial reporting, statistical accounting, budgeting and long-term fiscal projections. Guarantees are difficult to specify for accounting treatment and consistent conceptualization of liabilities. These difficulties make it attractive for governments to treat obligations as off-budget and off-balance sheet contingent liabilities, rather than recognize them in financial statements and statistical accounts. Miller and Power’s territorializing, mediating, adjudicating and subjectivizing roles of accounting are utilized to analyse the reporting of UK government guarantees. Provisioning for guarantees is complex in financial reporting statements and often absent in national accounts, a deficiency which Eurostat has attempted to address by devising the concept of standardized guarantees and by securing more disclosure of contingent liabilities. There is potential for future research especially where there is greater mediation between the four modes of government accounting.

Item Type:Articles
Additional Information:This paper acknowledges financial support from the Leverhulme Trust (EM-2012-078).
Glasgow Author(s) Enlighten ID:Heald, Professor David
Authors: Heald, D., and Hodges, R.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:Accounting and Business Research
Publisher:Taylor & Francis
ISSN (Online):2159-4260
Published Online:15 February 2018
Copyright Holders:Copyright © 2018 The Authors
First Published:First published in Accounting and Business Research 48(7): 782-804
Publisher Policy:Reproduced under a Creative Commons License

University Staff: Request a correction | Enlighten Editors: Update this record