Public sector accounts suspect

Many of the country’s public enterprises are following out-dated accounting standards making their financial results suspect which would make foreign borrowing impossible, COPE Chairman D.E.W. Gunasekara said.

"The profits or losses reported by many of the state-owned enterprises are doubtful and we will not be able to borrow from overseas on the strength of their balance sheets. We need to adopt internationally accepted accounting standards as a matter of priority," the senior minister said.

In 2012, COPE had summoned officials of all 235 public enterprises that fell within its purview. "We received tremendous support from these enterprises and our relationships are always cordial," Gunasekera said.

He said out of the 41 large SOEs (state-owned enterprises) only eleven made losses with only four of them accounting for 95 percent of the combined loss.

"There are various reasons why they make losses. There is no one reason and reasons are often complex. The COPE will release a detailed report soon," Gunasekara told the launch of the 2012 annual report of the Treasury last week.

The combined losses of 55 state owned enterprises (SOEs) reported in the latest Treasury annual report grew 432 percent to Rs. 107.1 billion in 2012 from a profit of Rs. 32.3 billion in 2005 and up 48.6 percent from a loss of Rs. 72 billion in 2011, data released yesterday (03) by the Ministry of Finance and Planning showed.

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