Measurement Challenges and Consequences in the Australian Public Sector

Among the transformations in accounting and measurement practice that have swept through the public sector in the past decade, the widespread adoption of some variant of cuwent or replacement cost accounting for non-cuwent assets has attracted keen research attention (eg, Walker 1993, Walker et a1 1997). This paper addresses two key issues. First, it explains why cuwent cost accounting style measurement has proliferated in the budget- funded public sector while becoming largely1 extinct in the private sector. Second, it argues that the significance of measurement choices in the public sector extends beyond the appearance and composition of public-sector financial statements, and may have significant implications for contracting and outsourcing choices.