## Dispelling Fiscal Illusions: How Much Progress Have Governments Made in Getting Assets and Liabilities on Balance Sheet?

_IMF Working Papers, April 21, 2016_

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## Bibliographic details
- Authors: Timothy C Irwin
- Published: April 21, 2016
- Series: IMF Working Papers

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### Summary
- When rights and obligations are not recognized as assets and liabilities on a government’s balance sheet, the government’s deficit can be reduced by selling off-balance-sheet assets or incurring off-balance-sheet liabilities.
- This paper examines how much progress has been made in recognizing assets and liabilities and thus dispelling the fiscal illusions that such transactions create.
- Looking at the accounts, government-finance statistics, and long-term fiscal projections produced in 28 advanced economies in the period since 2003, it finds:
  - good progress in the recognition of some assets and liabilities, such as accounts payable and simple financial assets;
  - much less progress in others, such as civil-service pensions.

### Key Findings
- Coverage and recognition improvements:
  - Progress is uneven across asset and liability types.
  - Accounts payable and simple financial assets show good recognition progress.
  - Civil-service pensions show much less recognition progress.
- Scope of the analysis:
  - Data sources examined include accounts, government-finance statistics, and long-term fiscal projections.
  - The analysis covers 28 advanced economies and the period since 2003.

### Subjects and Keywords
- Subjects: Accrual accounting, Economic and financial statistics, Financial statements, Fiscal accounting and reporting, Government finance statistics, Labor, Pensions, Public financial management (PFM)
- Keywords: accounts payable, accrual accounting, balance sheets, country, deficit, Financial statements, Fiscal accounting and reporting, fiscal illusions, GFS asset, Global, government, government balance sheets, Government finance statistics, nonfinancial asset, pension assets, Pensions, summary balance sheet, summary GFS balance sheet, WP

### Disclaimer
- This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

*Source: Dispelling Fiscal Illusions: How Much Progress Have Governments Made in Getting Assets and Liabilities on Balance Sheet?, Timothy C Irwin, IMF Working Papers 2016, 095 (2016).*

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