LASAAC has provided an Advisory Notice on Accounting for Internal Transactions and Insurance Arrangements (PDF, 214KB). The notice relates to the treatment of internal transactions in the comprehensive income and expenditure statement (CIES).
The guidance addresses the following areas:
- The advisory notice is not mandatory and does not change or amend the Code of Practice requirements.
- Internal transactions are not permitted in the CIES by the Code of Practice.
- Previous LASAAC guidance on Accounting for Insurance in Local Authorities in Scotland (LASAAC, 2005) is withdrawn.
- Transfers to or from an insurance fund should be presented in the movement in reserves statements (MiRS).
- The Code requirements do not affect or dictate a local authority’s own internal arrangements for management control and recording purposes.
- Adjustments between management reporting and required CIES presentation should be made in the expenditure and funding analysis.
- The re-allocation or apportionment of underlying expenditure is acceptable, for example for presentation of costs incurred by the Housing Revenue Account or other segments under a ‘controllable budget’ arrangement.
- Illustrative examples showing management reporting presentation compared to CIES presentation are included.
- The accounting policy should be determined and disclosed in accordance with the Code requirements.
- Where material, restatement of 2017/18 comparatives is required.
LASAAC is grateful for the participation of, and contributions from, all stakeholders involved in the development of the guidance.