The Tower of Babel of public sector accounting: heritage assets under management contracts in the Brazilian context

Isielli Mayara Barzotto Martins Tierling, Henrique Portulhak, Susana Jorge and Patricia Siqueira Varela

Journal of Public Budgeting, Accounting & Financial Management, 2026, vol. 38, issue 2, 346-364

Abstract: PurposeThis 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/approachA 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.FindingsResults 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/valueThe 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.

Keywords: Cultural assets; Contracting out; Recognition; Disclosure; Financial statement standards (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jpbafm:jpbafm-08-2025-0243

DOI: 10.1108/JPBAFM-08-2025-0243

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