Purpose This research analyses how public sector entities account for heritage assets managed by a private sector not-for-profit organization under a management contract, and how these assets are disclosed. Design/methodology/approach A documental analysis was carried out based on management contracts, financial statements and extra-accounting reports from Brazilian states that have contracted out the management of heritage assets. Findings Results show that although some heritage assets are disclosed, inconsistency is observed regarding the recognition and disclosure criteria in the financial statements and extra-accounting reports among states and within each state. In cases where heritage assets were recognized, no information on fair value measurement procedures and on subsequent expenditures treatment was found. Originality/value The need to control, preserve and recognize heritage assets has raised heated discussions in the public sector accounting field. Accounting issues related to their recognition, measurement and disclosure are intensified when these assets are the subject of a partnership between governments and private not-for-profit organizations, given that these contracts increase the information demand for decision-making and accountability. This research adds evidence that current accounting requirements for heritage assets are not leading to comparability of public sector financial statements, including when they are under third parties' management, instead generating a Tower of Babel-like scenario.
Tierling et al. (Sun,) studied this question.