Financial Reporting for Heritage Assets. Towards an International Public Sector Accounting Standard?

In the last decades, a strong debate around the harmonization of public sector accounts spread at an international level. In this process, the International Public Sector Accounting Standards Board (IPSASB), through the issuing of the IPSAS, and the EU Commission, through the launch of the European Public Sector Accounting Standards (EPSAS) project, have played a pivotal role. Within this stream of research, heritage assets accounting represents a problematic issue, still raising many concerns about (i) a proper definition of such items, (ii) the opportunity of their recognition in the financial reporting statements, (iii) the measurement criteria to adopt, (iv) the additional disclosing information to provide. Recently, the IPSASB opened a discussion by releasing the Consultation Paper (CP) “Financial Reporting for Heritage in the Public Sector”. Against this background, this paper intends to join in the debate on heritage reporting by carrying out a critical analysis of the CP in order to highlight its strengths, weaknesses and make recommendations. Hereby, we mainly refer to the Italian context. We address our research question by applying a qualitative method of investigation, through the review of relevant institutional documents issued by two main players in the cultural and accounting field (i.e. IPSASB and the MEF) with a critical eye. Our main finding is that, even if the proposals included in the CP represent a first step toward an organic regulation of heritage asset reporting, there remains much room for improvement, especially in finding a proper method to assess the financial value of such kind of assets.i