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Department of Health consults on 2016-2017 Group Accounting Manual

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12 May 2016

The Department of Health have issued a consultation on the Department of Health Group Accounting Manual 2016-17. The consultation is open until 1 July 2016.

The Department of Health Group Accounting Manual (DH GAM) includes mandatory accounting guidance for all NHS bodies on completing their statutory annual report and accounts.  The DH GAM requires departmental group bodies to follow the requirements of International Financial Reporting Standards (IFRS), as adopted by the EU, and the HM Treasury Financial Reporting Manual (FReM).

The DH GAM contains detailed accounting guidance for when departmental group bodies are required to depart from/make specific disclosures in addition to IFRSs and the FReM or when faced with particular circumstances that IFRSs or the FReM do not address.

In previous years Monitor and the Department of Health issued separate manuals for this purpose; one targeted at NHS foundation trusts and the other at the remainder of bodies within the Department of Health accounting boundatry (including NHS trusts, clinical commissioning groups and arm's length bodies).  This year, the two manuals have been merged into one. 

The consultation is seeking views on the following specific principal changes that have been proposed for the 2016-17 DH GAM:

  • Director benefits disclosures (applicable to NHS foundation trusts only).  The consultation proposes to remove the requirements for NHS foundation trusts to make the disclosures set out in the Companies Act 2006 section 412.  This would remove divergence with the FReM;
  • IAS 39 Financial Instruments: Recognition and Measurement (applicable to NHS foundation trusts only).  The consultation proposes to withdraw of the FReM divergence on the discount rate applicable to the measurement of fair value of future cash flows from financial instruments.  It is proposed that NHS foundation trusts follow the FReM in this respect;
  • Revisions to the guidance on parliamentary accountability and audit reports (not applicable to NHS foundation trusts); and
  • Capitalisation thresholds for non-current assets.  The consultation proposes that all entities within the accounting boundary apply a £5,000 de minimis capitalisation threshold for non-current assets.

The DH is also seeking comments on some more minor proposed amendments to the DH GAM in addition to any general comments. The press release and related documents are available on the DH website.

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