The Local Authority (Scotland) Accounts Advisory Committee (LASAAC) first issued guidance on the Statutory Basis for Accounting for and Disclosing Reserves in 2005. There have been a number of changes in the financial reporting framework in the 15 years since the guidance was issued. LASAAC has therefore revised and updated the guidance to ensure it remains fit for purpose.
This updated guidance is aimed at assisting practitioners operate reserves in a helpful way, while also meeting the requirements of the Code of Practice on Local Authority Accounting in the UK, as well as applicable legislation.
The guidance represents proper accounting practices under section 12 of the Local Government in Scotland Act 2003. It is consistent with both the code and applicable legislation but further, it represents mandatory guidance for Scottish local government bodies.
The scope of this guidance does not include advice on the level of balances that a local government body should hold in its reserves as that is a matter for each body to determine based on its individual circumstances.