Rodrigo Ferreira Lima
Master's – Analysis of revenue recognition in Public-Private Partnerships (PPP) of Public Lighting
Advisor: Prof. Dr. Luiz Nelson Guedes de Carvalho
Comission: Profs. Drs. Maria Elisabeth M. Carvalho Andrade, Fábio Gallo Garcia and Eric Aversari Martins
Class: 217, FEA-5
The provision of the public service has undergone sensible transformations since the beginning of the 20th century. From a patrimonialist administration, when power was handed over to the monarch, it was transferred to a bureaucratic administration with presuppositions of efficiency, but slow and without meeting the demands of the citizens. Thus, in the second half of the twentieth century, several countries went to a management administration, focused on achieving results and organizational performance, then emerges New Public Management (NPM). Linked to the management administration and to a moment of fiscal crisis suffered by the Brazilian State, the investments in infrastructure were impaired. As a solution, concessions have been encouraged by seeking investments in infrastructure and improvement in the provision of the public service. In order to standardize this new business model, international standards, such as IFRIC 12, were applied to better express the economic results of these contracts. The justification for the relevance of this work is the fact that the Brazilian State is still unable to conduct investments in infrastructure alone; additionally, even if there were such conditions, the possibility arises of doing so in partnership with the private sector, eventually generating new opportunities for capital allocation and economic development. The fiscal crisis experienced by public authorities encourages each year the increase in PPP contracts and the possibility of various forms of obtaining credit which would cause concessionaires to seek resources in previously untapped markets. Given this moment, proper application of accounting standards is necessary. Thus, this research seeks to answer the determinants for the accounting recognition of revenues in administrative concessions. The methodology had a qualitative approach and had semi-structured interviews of ten participants, two managers of public service concessionaires, three university professors and five bankers who work in the structuring of PPP projects and in the credit analysis of concessionaires. It was possible to observe that the market differs in the interpretation and application of IFRIC 12 although, in general, they see it as positive. The analysis of the qualitative data was coded based on the template analysis technique in 18 categories, which allowed to analyze the perceptions and opinions of the ten interviewees. The findings of the analysis point to arbitrary application of concession revenues as well as a divergence in the market in revenue recognition techniques. In addition, it was observed with the interviewees looking for an accounting standard that is more practical, although the IFRS proposal of accounting is based on principles and for an accounting standardizer for the concessions.
*Abstract provided by the author