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Puerto Rico government cites 'substantial doubt' about its solvency
Source: Reuters
World | Wed Feb 17, 2016 3:29am EST
Puerto Rico government cites 'substantial doubt' about its solvency
SAN JUAN | BY NICK BROWN
Puerto Rico's government said it had "substantial doubt" about its ability to operate long-term, and cited a threat to public services if its Government Development Bank misses debt payments, in a draft of long-delayed fiscal year 2014 financial data released Tuesday.
The 366-page draft, which has not yet been audited, follows criticism from some U.S. lawmakers and financial creditors that Puerto Rico has not been transparent with its finances.
The U.S. territory is mired in economic crisis, facing a 45 percent poverty rate and a dwindling tax base as locals flock to the mainland United States. It is hoping for help from Congress in resolving its $70 billion debt load.
"The commonwealth's management believes that there is substantial doubt as to the ability of the primary government" and other governmental entities "to continue as a going concern," the report said.
Under federal accounting standards, a government is evaluated on whether it is likely to be a "going concern" 12 months after the accounting is done. Governments are not going concerns if there are doubts about abilities to meet financial obligations.
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Puerto Rico government cites 'substantial doubt' about its solvency
SAN JUAN | BY NICK BROWN
Puerto Rico's government said it had "substantial doubt" about its ability to operate long-term, and cited a threat to public services if its Government Development Bank misses debt payments, in a draft of long-delayed fiscal year 2014 financial data released Tuesday.
The 366-page draft, which has not yet been audited, follows criticism from some U.S. lawmakers and financial creditors that Puerto Rico has not been transparent with its finances.
The U.S. territory is mired in economic crisis, facing a 45 percent poverty rate and a dwindling tax base as locals flock to the mainland United States. It is hoping for help from Congress in resolving its $70 billion debt load.
"The commonwealth's management believes that there is substantial doubt as to the ability of the primary government" and other governmental entities "to continue as a going concern," the report said.
Under federal accounting standards, a government is evaluated on whether it is likely to be a "going concern" 12 months after the accounting is done. Governments are not going concerns if there are doubts about abilities to meet financial obligations.
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Read more: http://www.reuters.com/article/us-usa-puertorico-debt-idUSKCN0VQ045
