Example of DEL accounting analysis for PFI v. conventional procurement

Date published: 23 June 2015

This page provides worked examples to show how accounting treatment varies between conventional and PFI procurements.


The following are illustrative examples of how accounting treatment varies between conventional and PFI procurements; and between on-balance and off-balance sheet PFI procurements.

Departments should be aware that following the introduction of International Financial Reporting Standards (IFRS) in 2009-10 there is a difference between the budgeting and accounting treatment of PFI and other service concession arrangements.

Departments should consult their finance divisions for guidance on how to undertake these calculations in particular cases.

The changes planned by HM Treasury as part of the clear line of sight alignment project will remove cost of the capital charge/credit from budgets, estimates and accounts. These changes will be applicable from 2010-11.

Example one below reflects the appropriate treatment up 2009-10. Example two has been updated to reflect the changes applicable from 2010-2011. In practical terms, the only difference is that the cost of capital is removed from 2010-11.


Back to top