This paper examines the operation of the UK government's Private Finance Initiative (PFI) from the viewpoint of accounting in the National Health Service. It explores how the entity concept may be used to remove representation of the economic consequences of such schemes from public accounting reports. Illustrations are provided from the accounts of hospital NHS Trusts. with their high-value and politically sensitive capital projects. The paper provides contemporary evidence of financial reporting of PFI schemes and the contradictions between form and substance of these transactions.