The role of the Financial Reporting Advisory Board (FRAB) is “to ensure that government financial reporting meets the best possible standards of financial reporting by following Generally Accepted Accounting Practice (GAAP) as far as possible”.  The FRAB includes representatives from the accountancy profession in the private and public sectors, academia and government bodies.  The board meets regularly to consider proposed changes to policy and practice.

Key topics discussed during the meeting were:

• An update on the simplifying and streamlining annual reports and accounts project since the April 2014 meeting including the work undertaken to produce a consultation paper on this matter.  The consultation was subsequently issued by HM Treasury in July 2014.  The work of the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Local Authority (Scotland) Accounts Advisory Committee (LASAAC) in this area was also noted.
• An update on the European Public Sector Accounting Standards project.
• An overview of the Whole of Government Accounts (WGA) 2012-13 which was published on 10 June 2014.
• An update on the changes being made to the International Accounting Standards Board (IASB) and The International Public Sector Accounting Standards Board (IPSASB) conceptual frameworks and implications for public sector reporting.  The bulk of the IPSASB framework (phase 2 – elements and recognition, phase 3 – measurement and phase 4 – presentation) is due to be approved in September 2014.
• An Exposure Draft to be consulted on in the summer proposing amendments to the government financial reporting manual (FReM) to reflect the application of IFRS 13 ‘Fair Value Measurement’ in the public sector.  The proposals contained within the Exposure Draft remain unchanged to those discussed in the April 2014 meeting.  The Exposure Draft will include a new “principles based approach” to determining the use of IFRS 13 ‘Fair Value Measurement' in the public sector.  HMRC and CIPFA propose that IAS 16 ‘Property, Plant and Equipment’ is adapted such that IFRS 13 applies to assets which are not held for their service potential and to surplus assets which can be disposed of.    Under the proposal, IAS 16 will continue to be adapted to ensure that assets in use that are held for their service potential are held at current value and for those assets that are surplus where there are no restrictions on disposal, IFRS 13 will apply.  Where there are restrictions, a current value measurement will continue to be applied.
• An update on proposed changes to the FReM 2015/16 including the adoption of IFRS 13 Fair Value (as indicated above) and corresponding changes to IAS 16 and IAS 38 adaptations and changes to the form and content of the annual report and accounts as a result of the simplifying and streamlining project.
• Proposed changes to the 2015/16 Code of Practice on Local Authority Accounting in the UK.  A consultation was subsequently issued by the CIPFA the LASAAC in July 2014.

Click here for detailed minutes and other supporting documents on HM Treasury website.