Consolidated balance sheet of local self-government entity in Poland - legal bases and its usefulness

The consolidated balance sheet of the local self-government entity reflects fully and integrally its assets and financial situation. Moreover, it covers, in most cases, the following undertakings: the local self-government entity, self-government budgetary entities (including the office), self-government budgetary establishments, independent public (self-government) health care units, self-government cultural institutions (e.g. public libraries, theatres, museums), controlled companies or partnerships, co-controlled companies or partnerships and companies or partnerships under substantial influence (e.g. community partnerships, special purpose vehicles established under public private partnership). The aim of the paper is to analyze and evaluate the legal basis for the consolidation of the balance sheet in Poland, to indicate the scope of its usefulness and practical problems associated with the use of consolidation procedures. The study focuses predominantly on the purposes, various accounting principles and usefulness of a consolidated balance sheet of a local self government entity. According to the analysis conducted in the paper, there is still insufficient awareness of the essence of the consolidation of the financial statements in the context of public finances in Poland. It also seems that the state authorities, local self-governments, and all other current and potential users of the reports prepared by public finance sector entities should better recognise the new quality of financial information presented in the consolidated financial reports.