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 included: 

• Financial Reporting Manual (FReM) 2016-17 and 2017-18 – a paper was introduced by HM Treasury providing the Board with the revised FReM 2016-17 and illustrative statements. A draft FReM and illustrative statements for 2017-18 was also presented for consideration.
• International Financial Reporting Standard 9 Financial Instruments consultation feedback. A paper was produced summarising the consultation feedback.  A number of respondents to the consultation saw the new impairment model as providing the greatest challenge.  The impairment approach in the consultation was received positively and HM Treasury have indicated that it proposes to mandate this across government.  Additionally it was highlighted that HM Treasury are planning to mandate the use of IFRS 9 for hedge accounting, implement retrospective application with no restatement and maintain the existing interpretations in the FReM.  Three areas were identified as requiring further work – analysis of loss allowances on liabilities held within the public sector, the impact of financial guarantee contracts and development of application guidance.
• IFRS 15 Revenue from Contracts with Customers consultation feedback.  A paper was produced summarising the consultation feedback and proposing next steps for implementation.
• Discount rates – a paper was presented setting out the discount rates to be applied for 2016-17. The Board was asked for its views on delaying the long-term discount rate update and conducting a full review of the discount rate policy.
• An update on IFRS 16 Leases was given and proposed steps for implementation in the public sector context.
• Feedback was sought on the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Local Authority (Scotland) Accounts Advisory Committee (LASAAC) exposure draft of the 2017/18 Code of Practice on Local Authority Accounting in the UK. 

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