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EFRAG to hold a Board meeting in January 2015

08 Jan 2015

The European Financial Reporting Advisory Group (EFRAG) will hold a Board meeting on 14 January 2015 in Brussels.

An agenda with supporting papers and details on how to register for the public meeting can be found on the EFRAG website.

HM Treasury issues new financial reporting manual (FReM)

08 Jan 2015

HM Treasury has issued a revised version of the government financial reporting manual (FReM) applicable for accounting periods commencing on or after 1 January 2015.

The Government Financial Reporting Manual (FReM) is the technical accounting guide to the preparation of financial statements. It complements guidance on the handling of public funds published separately by the relevant authorities in England and Wales (HM Treasury and the Welsh Assembly Government respectively), Scotland (the Scottish Government) and Northern Ireland (the Executive Committee of the Northern Ireland Assembly). The FReM is prepared following consultation with the Financial Reporting Advisory Board (FRAB) and is issued by the relevant authorities.  

The FReM applies to “all entities, and to funds, flows of income and expenditure and any other accounts that are prepared on an accruals basis and consolidated within Whole of Government Accounts (with the exception of the accounts of any reportable activities that are not covered by an Accounts Direction)”.  It does not apply to Local Government, those Public Corporations that are not Trading Funds, and NHS Trusts and NHS Foundation Trusts.   

The latest version of the FReM can be accessed on the HM Treasury website, here.

FRAB minutes for November 2014 meeting released

06 Jan 2015

The minutes of the Financial Reporting Advisory Board’s (FRAB’s) meeting of 27 November 2014 have been made available on the HM Treasury website.

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:

  • The proposed introduction of IFRS 13 Fair Value Measurement into the various public sector accounting manuals for the 2015-16 financial year.  HM Treasury proposed application of IFRS 13 without adaptation by the public sector, but with enhanced guidance in the FReM to explain the restrictions that are likely to apply in the public sector.  The Treasury also proposed amendments to the categories into which public sector assets can be classified for accounting purposes, introducing a new category of 'surplus assets not held for their service potential'.  In a change from the current FReM, it was proposed that in the 2015-16 FReM assets that fall within this category, as well as surplus assets held for their service potential which are not subject to restrictions on sale, should be valued based on their highest and best use.  The FRAB agreed the introduction of IFRS 13 into the FReM for 2015 as proposed.  However, the FRAB did not support a further amendment proposed by the Department of Transport to introduce an option for an entity to elect to apply IFRS 13 without interpretation to assets which are held for their service potential but where the entity's business model is to hold the assets to generate future inflows of economic benefit.
  • An initial discussion on the implementation of IFRS 9 Financial Instruments for public sector bodies.  FRAB members noted that it is hard to predict the impact given the potential for changes in policy and that the next step would be for the Relevant Authorities to plan for the introduction of the standard.  This should be on the basis of the current effective date as EU adoption is now expected on time.
  • An initial discussion on the implementation of IFRS 15 Revenue from Contracts with Customers for public sector bodies.  The FRAB agreed that it was necessary to begin the initial steps of implementing this standard and that a working group of the Relevant Authorities should be set up.
  • An update on the progress of the European Union's EPSAS project.  The Chairman concluded that, regardless of the approach ultimately taken in Europe, there would remain a need for the FRAB.
  • An update on the Simplifying and Streamlining Annual Report and Accounts project since the June 2014 meeting.  In particular, Board members commented on the need for clarity regarding the boundaries of the requirement for the Annual Report and Accounts to be fair, balanced and understandable and discussed how sustainability should be incorporated into the Annual Report.  They also discussed proposals for a 'FREM light' for certain entities and developments in public sector integrated reporting
  • Approval of the updated FReM and illustrative financial statements for the 2015-16 financial year, as well as minor updates to the 2014-15 FReM.  The 2014-15 amendments were approved, with some minor amendments proposed to the 2015-16 requirements.
  • The proposed amendments to the Code of Practice on Local Authority Accounting both for 2014-15 and 2015-16, following the CIPFA/LASAAC consultation on this.  The 2014-15 amendments were approved, with some minor amendments proposed to the 2015-16 requirements.
  • Approval of the Department of Health Group Accounting Manual 2014-15.
  • The working practices of the FRAB.  It was noted that there are relatively few meetings of the Board and the Secretariat were asked to consider this point.

The agenda, detailed minutes of the meeting and copies of the papers presented are available on the HM Treasury website.

FCA implements requirements for listed companies to report on payments to governments

05 Jan 2015

The FCA has published PS15/1, which implements the requirements of the EU Transparency Directive regarding reporting on payments to governments by companies in the extractive or logging industries. The new requirements are applicable for periods commencing on or after 1 January 2015 and the report must be published within six months of the year-end.

The requirements published by the FCA supplement the requirements of the Reports on Payments to Government Regulations 2014 introduced into UK law in December 2014.  The FCA's instrument extends the scope of these requirements to include entities incorporated outside the EEA whose only or first EEA listing is London and also accelerates the timetable within which the report must be published by listed companies (unlisted companies in the extractive or logging industries must publish a report within 11 months of the year-end).

The policy statement is available from the FCA website.

Correction list for hyphenation

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