Examining the evolution of consolidated financial statements in the UK public sector

The ongoing Covid-19 epidemic has put significant pressure on governments, both financially and to maintain effective public service delivery. The UK's experience with whole of government accounts (WGA) shows that, first, although this tool is not the cure for all problems, But the WGA has highlighted assets and liabilities (such as future retirement debts, clinical negligence claims, and public-private partnership obligations) that are not currently covered by public accounting principles. Second, there is evidence that WGA helps with planning, facilitates asset decision making, increases public sector financial transparency, and facilitates discussions about long-term risk management and fiscal policy. The end of 2021 marks the 10th anniversary of the first consolidated financial statements in the United Kingdom, representing the first set of audited financial statements prepared in accordance with International Accounting Standards for the UK public sector. Given that governments around the world are investing significant resources in modernizing their financial reporting practices and systems, we need to consider whether these changes will increase monetary value and whether they will result in tangible benefits. Due to the need for further research to realize the practical benefits of public sector accounting reform, this article examines the usefulness of WGA in a country like the United Kingdom and outlines the limitations and challenges ahead. Given the increase in future liabilities and rising debt levels, this article explains how WGA information can help governments make decisions.