CIPFA/LASAAC, a joint board of the Chartered Institute of Public Finance and Accountancy and the Local Authority (Scotland) Accounts Advisory Committee, has today issued the Code of Practice on Local Authority Accounting in the United Kingdom 2018/19 (available
here).
The new Code introduces the two new financial reporting standards – IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers. These standards work to promote increased transparency of the effect of transactions on local authority finances. The intention is to help users better understand local authority financial statements and increase effective decision making, stewardship and accountability.
Don Peebles, Head of Policy and Technical UK at CIPFA, said: “CIPFA/LASAAC has worked hard, starting as early as 2015, to ensure that it has understood the impact of these standards and particularly IFRS 9 on local authority accounts and finances.
“Within the boundaries of effective financial reporting, CIPFA/LASAAC has been concerned to understand both the practical and technical aspects of the standard, and as a result both CIPFA and CIPFA/LASAAC have supported the work of government on statutory mitigation for particular investment vehicles”.
To help local authorities understand and prepare for the effects of these two new standards, CIPFA/LASAAC last year issued the agreed Code provisions on both standards alongside the 2017/18 Code. In December 2017, CIPFA issued early guidance, IFRS 9 Financial Instruments: An Early Guide for Local Authority Practitioners, to help support local authorities in their adoption of IFRS 9.
Both standards have the potential to have budgetary effects, particularly in terms of the timing of recognition of the relevant transactions. CIPFA/LASAAC has worked with the government and the devolved administrations to support the consideration of both the ongoing and transitional effect of IFRS 9 on collective investment vehicles and will keep this situation under review.
ENDS
Code of Practice on Local Authority Accounting in the United Kingdom 2018/19