Research On Accounting Treatment Of PPP Projects With The Franchise Rights

In recent years,China's economy has developed rapidly,but the construction of infrastructure has been at a relatively low level,which has severely restricted the pace of further economic development.The construction of infrastructure by the government means huge investment.However,like many developing countries,China is facing the problem of government financial difficulties,so the development of infrastructure construction is limited.The government-social capital cooperation model or PPP model is a brand-new project financing method,which is of great significance for solving the problem of the current infrastructure construction lag.Therefore,once the PPP model has been proposed by many government agencies,it is particularly applicable in developing countries..The most representative and most widely used PPP model is the BOT model.China's BOT model was used for the first time in the power plant project in Shenzhen in the 1990 s,and the construction and operation of the project were very smooth.It solved the capital problem for the government's infrastructure construction.With this successful experience,local governments have begun to attach importance to this mode of operation of the BOT,making the BOT model an important way for China to use social capital to provide public infrastructure.Once the PPP model was proposed in China,it was strongly supported by the government.Experts,scholars and the practice department jointly established a standardized management method,but the related accounting standards were still in a blank state.Accounting of PPP projects involves the accounting treatment of both the government granting party and the project operator.Whether the government grantor should be recognized as an asset and how to confirm,measure,and report on the facility.At present,there are no guidelines for reference in China's practice,which has resulted in PPP project assets becoming "orphan assets." For project operators,China has not issued any accounting standards for PPP projects that are of a franchise nature.In 2008,the Ministry of Finance participated in the public sector in the "Enterprise Accounting Standards Interpretation No.2" fifth item "Enterprises adopt construction transfer method(BOT).How should the infrastructure construction business handle the accounting requirements for the BOT project operator's accounting treatment,but the content is too simple and lacks detailed specifications,leading to greater autonomy in the accounting process and affecting the quality of accounting information.In summary,this article hopes to discuss the accounting treatment theory of PPP projects that are applicable to the nature of Chinese franchise rights through the analysis of China's accounting standards and the reference to the government accounting standards of foreign franchise rights projects.Combined with the typical case analysis of the sewage treatment plant,the system comprehensively discusses the urgent issues to be solved in the current accounting of PPP projects and proposes specific solutions.From the government granting party and the project operator,they separately introduce accounting standards for handling the PPP projects of the US federal government on the nature of the franchise rights.The purpose is to build the accounting standards applicable to the granting of franchise rights for the granting party and the operator of the PPP project,and ultimately improve the Accounting Information Quality of PPP Projects.