Code Of Practice On Local Authority Accounting In The United Kingdom 2025/26
Summary
This Code is prepared under International Financial Reporting Standards (IFRS), which have been adopted as the basis for public sector accounting in the UK. The 2025/26 Code has been developed by CIPFA/LASAAC and has effect for financial years commencing on or after 1 April 2025.
Format
PDF
Published
June/2025
Author
CIPFA
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Please note: this version of the Code of Practice on Local Authority Accounting in the United Kingdom (2025/26) was republished on 20 October 2025 to correct the following paragraphs: 2.1.2.64, 3.1.1.17, 4.1.1.6 , 4.3.5.1, 4.5.2.18 and 4.5.3.2. These corrections address residual references to measuring intangible assets using the revaluation model, which was withdrawn in the 2025/26 Code, as well as a small number of typographical errors.
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 2025/26 edition of the Code has been developed by CIPFA/LASAAC and has effect for financial years commencing on or after 1 April 2025.
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 substantial and significant accounting change due to CIPFA/LASAAC having regard to HM Treasury’s Thematic Review on Non-investment Assets. The main changes included in the Code are:
- For property, plant and equipment a revaluation is required once every five years, or on a five-year rolling basis, supported by indexation in intervening years. In the rare cases where no index is available, local authorities may use a desktop valuation in year three instead of indexation.
- Intangible assets must be measured at historical cost.
- A clarification that undertaking a full revaluation should not be a default process to demonstrate there has not been a material impairment of an asset.
- The Better Reporting Group are producing application guidance to assist with implementing the changes.