Registrert revisor og cand.philol Leder Samfunnsøkonomisk Fanny Voldnes enhet i Certified Public Accountant, Cand.philol.

Transcription

1 How new accounting rules have influence on society Making Fanny Transparency Voldnes Possible Oslo, 16h February 2018 Registrert revisor og cand.philol Leder Samfunnsøkonomisk Fanny Voldnes enhet i Certified Public Accountant, Cand.philol. Fagforbundet Head of Economics Fagforbundet

2 Which accounting rules are we talking about? Ø Those accounting rules that focus not on historical reporting, bu calculations based on future revenue potential = fair value adjustments à Mark-to-Market is one of these Ø The reason why these accounting rules have emerged is that IFRS focus on balance sheet values, not the profit & loss statement anymore Ø The shift happen in Norwegian Accounting Law from 2005, but followed international trends Ø Fair value accounting like mark-to-market belongs to - introduces a short-term perspective and - the measurement methods introduces large manipulation opportunities on top of the problems the measurement methods introduce by themselves Ø It is accepted that IFRS amplified the financial crisis of 2008

3 Consequences of moving to Accounting Law for the hospitals Balanse Helse Sør RHF Helse Sør Konsern (Beløp i hele tusen kroner) Note Justering Immaterielle eiendeler Varige driftsmidler Investeringer i datter- og tilknyttede selskaper Øvrige finansielle anleggsmidler 10, Sum anleggsmidler Varer Fordringer Bankinnskudd, kontanter og lignende Sum omløpsmidler Sum eiendeler Foretakskapital Strukturfond Annen innskutt egenkapital Sum innskutt egenkapital Annen egenkapital Sum opptjent egenkapital Sum egenkapital Avsetning for forpliktelser 6, Annen langsiktig gjeld Betalbar skatt Annen kortsiktig gjeld Sum kortsiktig gjeld Egenkapital og gjeld Difference = side 3 NTL Brønnøysunregistrene

4 Consequence? Ø New accounting rules result in deficits due to increased depreciation and increased focus on revenues and privatization Ø Use of the Accounting Law for hospitals meant new, calculated, higher values on public property Ø Public services as a result appears as expensive Ø A paradox because: - The assets are already paid for - Agreement that many uncertain elements result in uncertain amounts - The information is useful, but there is a need for different information in different situations Ø Research show that there would not have been deficits in the hospital accounts if the accounts were done as they were prior to the reform the municipal accounting system

5 From Helse Vest Board protocol

6 Accounting rules as leverage benefit plans is wound up from 2005

7 Forsvarsbygg and pension 1. The management wrote in a letter to the Ministry of Defence that they had to fire employed cleaners and employ unskilled labour in order to meet the revenue target (performance requirements). 2. The unit had been charged with a large share of shared cost which they could not do anything about (incluing pension cost) 3. Pension cost increased by 130% (from 43 to 99 mill) in the budget for 2008 from 207 due to new accounting rules The business was depleted. Was stopped by the Minister of Defence, but the effect of the new rules are clear

8 Capital in the 21st century

9 LOs research results Høgskolen i Hedmark: - No deficit in hospitals if they had had their accounts as before the hospital reform - Norway does not use more on health than other countries we can compare ourselves with (adjustments of numbers from OECD-report) - Profitability-based financial management system little suitable for the public sector, Must develop further the traditional regulation for good public financial management. FAFO: - Accounting rules developed by private auditors (legitimacy problem) - Both managers and employee representatives are of the opinion that there are now more focus on economy and less on the services offered. LO s own work: The system results first and foremost in a revaluing of assets and liabilities (buildings, pension liabilitities) = increased cost for services - This is not only a technical change, but has significant political consequences Reports can be found at