The Failure of GASB 34 Public Accounting?
I had hoped that GASB 34 would make obvious our Ponzi scheme of building suburban infrastructure. It requires accounting for capital assets like streets and water systems, fire stations and even fire trucks, like private businesses must.
Reading Joe Minicozzi's article that the liability of owning and maintaining those assets is not required to be published. But isn't that a challenge for any organization which owns assets like buildings and vehicles?
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Thanks John. Government accounting is not like other forms of accounting. If you run a business, you have to show your depreciating assets and your accumulating liabilities on your balance sheet. If you run a government, many accumulating liabilities are never accounted for -- they are not required to be shown -- and many things are counted as assets that really aren't.
For local government, the emphasis is on cash flow and the current budget and not on long term fiscal health. This approach was heavily influenced by bond investors who are concerned with whether or not a loan will be repaid.
What can we do about this? Knowing the problem is one thing, but it seems like getting changes into these types of documents would be a huge leap forward for killing the growth ponzi scheme.
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