The role of balance sheets and strong financial reporting in policymaking was explored at a seminar in Washington DC this week.

Because public liabilities, for example debt and pension commitments, are so large, some governments are not keen on making them publicly assessable, the session heard.

But the liabilities will “kick in” down the line, whether on the balance sheet or not, Bernhard Schats, senior accrual accounting expert at the Austrian Court of Auditors, said.

“You can decide between a controlled crisis now or an uncontrolled crisis later, because the substance of the transaction is there. Not showing it [on the balance sheet] is not going to make it go away.

“But you can choose how to communicate it.”

He highlighted the fear of the public’s reaction of the large public liabilities – such as pensions – is the reason why some governments have not implemented the IPSAS on social benefits.

“A liability is a commitment to the citizens and I would say it is a positive thing to have as a government.”

Marc Wermuth, responsible for compiling the statistics of the public budgets of Switzerland on behalf of Swiss Federal Finance Administration, also said it is better to publish the liabilities “sooner rather than later”.

“The longer you wait, someday you won’t be able to hide it anymore”.