chapter  21
8 Pages

'Discussion on Municipal Accounts', R.F.Miller, Financial Circular, January 1905, 13-20

J.-1 pass on to consider in what fo rm the loans and loan expenditure of a local authority should be compiled and publish.,d. T he instincli\·e r"ply to such a question would probably be as "A Statement of Liabilities and .-\ssets, " of course. But I think there is room for discussion on this point. Such a Statement rath.,,· sugg ests the id.,a l>f a ssets valued and adjusted from time to time, and there a re legal dicta in dedsions bearing upon the bala nce sheets of limited companies to the effect that reserves and provisions affecting the assets should actually be d"ducterl from the assets to which thev are related, and not be shown as credit balances on the liabilitv sid" of the balanc" she"t. \Vithout condemning off hand the id"" of a balance sheet drawn up on Cl>mpany lines , l wish tl> place in contrast a balanc" sheet in tht! form ,,f a "Statement of Recd pts a nd Paym.,nts on Capital Account " as b"ing well suited to the special cha racteristic of loca l finance. I suggest to you the importance of dra wing up such a statement as will exhibit at a glance the tota l amount of loa ns and ca pita l expenditure to date, together with a total revenue handed over for repayment of debt and the actual repayments which have taken place, bringing forward under each heading the figures of a year previously and adding the transactions of the yea r to which the statement relates. Such a statement reca pitulates all expenditure of loans to dat.,, however temporary the purpose may have been, e.g., statutory borrowings to pay for the goodwill of

tramway or other undertakings acquired, or for Par· liamentary expenses, figure as " Receipts,'' while the " Goodwill·· or the " Expenses·· appear under the head of " Pa,·ments" ; whether thev are stated separately or fi1erged in large amountS is immaterial to my argument. I han~ prepared for your con\·enience a statement drawn up on these lines, to which I ask your kind attention when fo11owing my subsequent remark ....