The diversity of accrual policies in local government financial reporting: an examination of infrastructure, art and heritage assets in Germany, Italy and the UK

This paper examines the norms and practices for infrastructure, art and heritage assets in six cities, across three European countries, to determine how the national norms of accrual accounting compared with each other, and with IPSAS, and how the practices in each city compared with the norms. We identify significant diversity between actual practices and the norms imposed by national policy-makers or set by IPSAS. Given that a longstanding concern of the literature has been on whether these kinds of assets should be included in governmental balance sheets and operating statements at all, it is striking how often the question was settled in practice by excluding art and heritage assets, even when this meant non-compliance with national norms. In our three countries, it is clear that comparability of the financial statements between countries was not a concern of policy-makers, and comparability between cities within each country not a concern of preparers.