14 December 2001
Enron sought bankruptcy protection this month after it emerged that it had hidden possibly billions of dollars in liabilities through off-balance sheet trusts.
Accounting standards-setters in the US have been put under pressure by a joint statement from the Big Five accountancy firms to change standards to make liabilities more transparent.
This, in turn, may force amendments to the UK's Financial Reporting Standard 5 – which determines the way PFI deals are treated.
Allan Cook, technical director of the UK's Accounting Standards Board, said: 'I think what may happen is a renewed interest in the US to develop a new approach not as close to risk and reward as we would like, and we will come under pressure to move closer to their [new standard]. We would have to think about the PFI implications.'
An accounting standards specialist in one of the Big Five predicted that the focus of PFI deals would then have to be value-for-money, not getting liabilities off balance-sheet, 'which is where it should always have been', he added.
But Nick Salisbury, PFI director at Barclays Bank, said this change of focus had already taken place in most central government departments.
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