Valuation of local government assets in Portugal

Alves, Jorge; Lopes, Jorge

http://hdl.handle.net/10198/1670

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Authors

Alves, Jorge

Lopes, Jorge

Abstract(s)

The questions regarding the elaboration of a register of the State assets, comprising both public and private domain goods, has been a major concern from national official bodies. Indeed, an updated register of State goods allows the possibility of producing, inter alia, a comprehensive national balance sheet of public assets and liabilities. After some failed attempts throughout the last decades, a profound reform in the public financial administration has been recently implemented in Portugal. The publication of the Official Plan for Public Accounting (POCP), from which stems one for the local government level, and the Cadastre and Register of State Goods (CIBE) constitutes a fundamental step for drawing up a register and valuation of public sector assets. The main objective of this study is to critically analyse the methodology used in the valuation of the State assets in Portugal, with a particular focus on the local government level. This is done through a review of the national legislation and the relevant international literature on this issue. In addition, a survey conducted on specific local authorities to ascertain the way they produce the balance sheet is also used in the analysis. The results of the study show that there are measurement problems in the elaboration of the financial statements, and there is a need for a clarification in definitions, particularly in what concerns the distinction between public and private domain of State assets. The study also suggests that a better account on the State assets, particularly on construction stock, has great implications for the management, repair and maintenance of the existing physical infrastructures.