Add generational equity and fair value system to reporting and budgeting says Accounting Professor, BusinessWeek Online, 5 December 2005

Tanaka Business School Accounting Professor, Paul Klumpes, is critical of the current accrual system of accounting and budgeting.

David Walker's suggestion that spending is out of control needs to be followed up. Unfortunately the present system of accrual accounting and budgeting reports only the accumulation of past practices using rubbery concepts of deficits. A statement of generational equity, together with a fair value system, should be implemented for reporting and budgeting.

Only this way will the cost of financial guarantees and other implicit and hidden government debts be revealed, thereby enabling democratic governments to fulfill their generational visibility to current and future taxpayers. Such developments can only improve the governance and transparency of governments to their citizenry, and uphold Washington's timeless wisdom of each generation paying its way.

Paul Klumpes
Imperial College
London