You might not have noticed, but Sydney's roads are getting better even without being fixed.

That's according to the city's councils, which have recently wiped from their balance sheets a billion dollars of liabilities such as run-down old roads, often without spending a cent.

Liverpool mayor Ned Mannoun. Liverpool Council shaved $200 million off its $260 million liability.

The $1 billion in accounting changes, uncovered by a Fairfax Media analysis of councils' financial statements for the past two years, prompted one expert to accuse councils of "accounting fiction".

The new determination by councils to reclassify roads as being up to standard comes at a crucial time for Sydney's local governments.