Code Of Practice On Local Authority Accounting In The United Kingdom 2025/26

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 operational 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.