Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 online

This publication is available as a downloadable PDF. Customers and subscribers will need to log in to CIPFA’s website to access the publication. The Code is also available in hard copy.

Local authorities in the UK are required to keep their accounts in accordance with ‘proper (accounting) practices’. Public sector organisations responsible for locally delivered services are required by legislation to comply with the terms of the Code of Practice on Local Authority Accounting in the United Kingdom (the Code). This 2021/22 edition of the Code has been developed by CIPFA/LASAAC and has effect for financial years commencing on or after 1 April 2021.

The Code specifies the principles and practices of accounting required to prepare financial statements which give a true and fair view of the financial position and transactions of a local authority. The Code applies to local government organisations across the UK including local authorities, police bodies, fire services and other local public service bodies.

This edition of the Code introduces a number of important amendments relating both to context and an understanding of requirements. Changes include:

• Reframing the Code requirements in terms of UK-adopted standards rather than EU adopted standards, reflecting the United Kingdom's withdrawal from the European Union.
• Confirmation of the accounting arrangements for the Dedicated Schools Grant to reflect changes to the statutory requirements.
• Amendments to confirm the existing adaptation in the Code for standards issued but not yet adopted.
• Augmentations to the reporting of estimation uncertainty.
• Confirmation of the reporting requirements for interest rate benchmark reform.

Importantly, the Code includes an appendix on the future implementation of the IFRS 16 Leases standard, which has been deferred for a further year. The appendix sets out the anticipated provisions in the 2022/23 Code and it will allow local authority accounts preparers to make effective preparations for the implementation of the standard in the 2022/23 financial year. Note that early adoption of IFRS 16 is not permitted, with the exception of Transport for London.