The FRAB's primary objective is "to promote the highest standards of financial reporting by government".  In its fulfilment of this objective it provides advice to the Treasury, the Scottish Ministers, the Executive Committee of the Northern Ireland Assembly and the Welsh Assembly Government on the introduction of new accounting standards, as well as supporting them in their efforts to better meet the needs of users of public sector financial reports.  Annually, the FRAB publishes a report on its activities over the past year.

In the period from April 2013 to March 2014, the main issues considered by the FRAB were:

• The application of the new suite of consolidation standards (IAS 27 (revised 2011) Separate Financial Statements, IAS 28 (revised 2011) Investments in Associates and Joint Ventures, IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities) to the public sector.  A key area of focus in this was the effect of these standards on the accounting for local authority maintained schools in England and Wales.  The efforts in this area culminated in the release in February 2014 of recommendations that local authorities should consolidate community schools, voluntarily controlled, voluntary aided and foundation schools.
• The application of IFRS 13 Fair Value Measurement by public sector bodies.  An acceptable conclusion on this has not yet been reached and a further delay in application has been deemed necessary.  This stems from the fact that a form of replacement cost current value is currently used to measure public sector assets and the consideration of whether this approach is the right one in terms of the information needs of users of public sector accounts and in relation to the guidance in IFRS 13.

The FRAB's role in stimulating the debate around the application of Fair Value accounting has shown how it can be most effective in promoting the highest standards of financial reporting.  However, the delay to public sector adoption of IFRS 13 again raises the issue that the time and resources needed to respond to new standards that are being developed cannot be underestimated.

Looking forward, the FRAB expects that developments arising from the European Commission’s European Pubic Sector Accounting Standards (EPSAS) project will have a significant impact on its activities and may even mean that its role has to adapt for it to continue to fulfil its statutory function.

The full report can be downloaded from the FRAB section of the UK Government website.