Study 7 - Performance Reporting by Government Business Enterprises
This Study identifies principal users of performance information, considers the needs of those users, and outlines forms of reporting that could be available to meet those needs. The Study is thereby concerned primarily with the provision of information about an enterprise's performance (covering both financial and non-financial aspects of performance) supplementary to the information provided in financial statements, in the context of general purpose financial statements.
The need for this Study arises from the fact that financial standards on their own are not always sufficient to give an indication of the overall performance of a particular organization. Public sector bodies can differ from private sector enterprises in both their objectives and finance. Although government business enterprises are normally required to operate commercially and usually take the same legal form as private sector business enterprises, the combination of the fact that they often enjoy a monopoly position and the political context in which they operate means that the user of financial reports can rely less on measures of performance such as return on capital employed. As a result, groups with an interest in the performance of government business enterprises - governments, legislators, taxpayers and consumers - may have difficulty in making informed judgments about the efficiency and effectiveness of government business enterprises.
Government business enterprises may not be delivering services in circumstances that are even close to being a competitive market. So the test of relative market efficiency and effectiveness cannot always be applied. The issue therefore is how to formulate performance measures that will enable judgments about efficiency and effectiveness to be made. This Study considers how such measures might be defined and how a government business enterprise's performance in relation to these measures might best be reported to those with an interest in its performance.
Copyright © 2015 The International Federation of Accountants (IFAC). All rights reserved.
Study 7 - Performance Reporting by Government Business Enterprises (PDF | 163K)
Date: Jan 01, 1996
Surveys & Reports
You must be signed in to the IFAC website in order to submit a comment. If you do not have an account, please register below. IFAC respects your privacy and will not send you unsolicited email or spam. You can subscribe to IFAC publications, change your subscription preferences, or manage your user profile at any time.