Research On Accounting Treatment Of BOO Projects

Now the Government is committed to promoting the Public-Private-partnership, which contains BOO project as an important part. However, the current "Enterprise Accounting Standards" and its interpretation do not contain specific guideline of accounting treatment of PPP project. And there’s not much relevant academic research. So it is necessary to explore and identify relevant accounting treatment under PPP mode. Shanghai Xinzhuang CCHP Project is a typical BOO project. In this paper, with a case study of accounting treatment of Shanghai Xinzhuang CCHP project, we combined theoretical analysis to research how the private part to do accounting treatment when economic activities happen, especially in BOO project.First of all, the thesis begins with the background of PPP project introduction, describes the practical and theoretical significance of PPP project. Then after a brief introduce of PPP related nouns, I put a discussion on the research status of PPP project accounting treatment studies at home and abroad. And innovation and the insufficiency of this article are also included in this part. Secondly, starting with the existing accounting standard existing, this paper introduces the domestic and foreign related laws and regulations, so as to the PPP project guideline. At this part, I talked about the IFRIC 12, PPP guideline of UK and Canada and Accounting standards Interpretation No.2 to further clarify the status quo of China’s BOO project accounting treatment. Thirdly, the author introduced the Shanghai Xinzhuang CCHP project with its background and project stages, including design, construction, financing and operation stage. According to those stages, this paper discussed how to do accounting treatment in each period.From the discussion above, the author thinks that our government departments should develop PPP accounting guidelines as soon as possible. It includes more details and the extension of project types. For the BOO project assets, they should be in accordance with accounting "substance over form" principle ", confirmed as "fixed assets", "intangible assets" or "financial assets" and amortized. For Borrowing costs of BOO projects, this paper argues they should be confirmed to "construction" before recapitalization. In addition, the author suggests that the potential obligations of the government should be acknowledged when converted into reality.Dealing with accounting treatment of BOO project case and discussing how to make accounting entries helps with the implementation of PPP projects and the construction of China’s accounting system.