A comparative study of the accounting treatment of heritage assets in South Africa and New Zealand

Abstract

Heritage assets belong to the people of a region and are safeguarded by the government in that region. It is of grave concern that most of these heritage assets are not accounted for at their true value in the financial statements of these regions especially in a time where accountability and governance is of grave concern to all stakeholders involved. The widely debated heritage assets accounting problem is at the forefront of various public sector accounting standard setters and received renewed attention in 2017 by a consultation paper issued by the International Public Sector Accounting Standards Board. Various comment letters were received from varied stakeholders and analysed as part of this study. Findings revealed that views about the accounting treatment of heritage assets is varied and further investigation is justified to ascertain whether the mandatory recognition of heritage assets will solve the heritage asset accounting problem. The financial statements of nine capital cities from South Africa and New Zealand were selected in this study. A content analysis was used to investigate whether the mandatory recognition of heritage assets is the solution to the heritage asset problem. The content analysis comprised both a thematic analysis, as well as a ratio analysis of the key differences and similarities between the two countries. The results provide valuable information about whether the mandatory recognition of heritage assets in South Africa and New Zealand leads to transparent and comparable heritage asset values.