Accounting Devices and Fiscal Illusions

 
Author/Editor: Timothy Irwin
 
Publication Date: March 28, 2012
 
Electronic Access: Free Full text (PDF file size is 520KB).
Use the free Adobe Acrobat Reader to view this PDF file

 
Summary: This proposed SDN surveys the various accounting stratagems which governments have used to meet fiscal targets—thereby sidestepping the need for true adjustment—and suggests remedial actions to limit this type of fiscal non-transparency. Types of creative accounting covered includes, for instance, currency swaps to hide a debt build-up (as in Greece in 2001–07), sale and leaseback of government property (for example, in the United States), assumption of long-term pension obligations in exchange for short-term revenue (Argentina, Hungary, and other Eastern European countries), use of public-private partnerships to defer the recognition of investment spending (for instance, Portugal), and reliance on non-cash compensation (such as pension rights) to reduce measured wage bills (in the United States, United Kingdom, etc.) As is evident from the examples given, these fiscal tricks have recently come under increased international scrutiny, highlighting the importance of good fiscal reporting, accounting, and transparency in general, for avoiding unpleasant surprises, ensuring government accountability, and containing fiscal vulnerabilities.
 
Series: Staff Discussion Notes No. 12/2
Subject(s): Fiscal consolidation | Fiscal rules | Fiscal reporting

Author's Keyword(s): Fiscal reporting | fiscal rules | fiscal consolidation
 
English
Publication Date: March 28, 2012
ISBN/ISSN: 9781475502640/2221-030X Format: Paper
Stock No: SDNEA2012002 Pages: 24
Price:
US$10.00 (Academic Rate:
US$10.00 )
 
 
English
Publication Date: March 28, 2012
ISBN/ISSN: 978-1-61635-386-5 / 2221-030X Format: A web quality merged PDF
Stock No: SDNET2012002 Pages: 24
Price:
Free
 
 
Please address any questions about this title to publications@imf.org