Over the last few years there has been a worldwide movement towards public accountability and more resource management. As a by-product of this, together with the introduction of various legislation and regulation, the need has arisen to define, value and record local authority assets and resources, and to do so using specific financial reporting guidelines.

The main purpose of this process is to enable authorities to make the most cost-effective use of their capital and to ensure that no asset is overlooked or under-utilised. National professional bodies have worked at an international level to ensure a similarity of approach in response to the increased awareness of the need to adopt common standards globally. However, these developments are not without their problems.

This paper sets out to examine one such problem i.e whether conventional methods of valuation are sophisticated enough to deal with the task effectively. Most valuation methods are based on the assumption that property is purchased and held for financial gain and that it will be utilised to meet that purpose. Yet, many public assets are held primarily to provide services to the community rather than to generate revenue or capital appreciation. Hence the values being assessed do not necessarily fit in with the philosophy of the undertaking concerned.

Using the results from research undertaken during 1995 and 1996 both within the UK and in New Zealand, the paper compares the experiences of the two countries with regard to current practise of how authorities record and value their assets primarily for financial reporting purposes.