Accounting Choice and Theory in Crisis: The Case of the Victorian Desalination Plant. Issue 3 (20th January 2017)

• Record Type: Journal Article
• Authors: Tan‐Kantor, Angela; Abbott, Malcolm; Jubb, Christine
• Is Part Of: Australian accounting review. Volume 27:Issue 3(2017:Sep.)
• Page Start: 273
• Page End: 284
• Publication Date: 2017-01-20
• Subjects: Accounting -- Australia -- Periodicals; Accounting -- Standards -- Australia -- Periodicals; Accounting -- Periodicals; Managerial accounting -- Periodicals; Corporations -- Finance -- Periodicals; 657.0994
• DOI: 10.1111/auar.12149
• Languages: English
• ISSNs: 1035-6908

Abstract

Abstract : This paper traces the financial developments of the desalination plant in the State of Victoria in Australia. The desalination plant was built via a public–private partnership (PPP) vehicle, and commissioned at a time when water storage levels in the state were low. Subsequent rainfall has meant that no water has yet been ordered by the Victorian Government from the plant. In the paper an analysis is undertaken of the impact of the manner in which accounting treatment has been used in valuing this infrastructure asset. It is concluded that the applied accounting policy choices and treatments for this infrastructure asset are not consistent with conventional accounting theory, the Conceptual Framework for accounting or generally accepted accounting principles. Abstract : The paper looks at the problems associated with accounting infrastructure valuations in the context of the desalination plant in Victoria, Australia. The applied accounting policy choices and treatments for this infrastructure asset are not consistent with conventional accounting theory, the Conceptual Framework or GAAP.