Should all capital goods of governments be recognised as assets in financial accounting?

Purpose: In recent years, accrual accounting has become increasingly popular in many governments. Yet some questions remain unresolved. Previous literature questioned whether all governmental assets should be capitalized. Whereas those studies mostly focussed separately on a limited number of assets, such as infrastructure, military assets or heritage assets, the purpose of this paper is to expand these views by taking a holistic approach to their treatment. Design/methodology/approach: The paper is based on a literature review combined with archival data, being the IPSAS (International Public Sector Accounting Standards). Findings: The analysis distinguishes between the business and government sectors of the economy and argues that business accounting for assets cannot be applied to the public sector without significant modification. Secondly, within the public sector, it is argued that "businesslike assets" (such as normal buildings and equipment) should be distinguished from "specific governmental assets" (such as art galleries), where the latter should be reported off balance sheet as community assets held in trust by governments for community enjoyment. Practical implications: The current paper presents a solution for recognizing capital assets in different situations. Originality/value: The paper reveals some basic differences in points of view between the governmental dimension versus a businesslike dimension in considering capital assets.