CIPFA/LASAAC consults on incorporating the requirements of IFRS 16 into the new Code of Practice on Local Authority Accounting
30 May, 2018
The Chartered Institute of Public Finance and Accountancy (CIPFA) and the Local Authority (Scotland) Accounts Advisory Committee (LASAAC) are seeking comments, via an ‘Invitation to Comment’, on proposals to incorporate the requirements of IFRS 16 ‘Leases’ into the 2019/20 Code of Practice on Local Authority Accounting in the UK (‘the Code’) which would apply to accounting periods beginning on or after 1 April 2019.
Local authorities in the United Kingdom are required to keep their accounts in accordance with ‘proper practices’. This includes compliance with the terms of the Code of Practice on Local Authority Accounting in the United Kingdom prepared by the CIPFA/LASAAC Local Authority Accounting Code Board.
The proposed developments for the 2019/20 Code, included within the consultation, are on IFRS 16 Leases . It is anticipated that the remaining changes to the 2019/20 Code will be included in the annual consultation in July 2018.
The consultation considers and welcomes feedback on the implementation proposals, including:
- recognition exemptions
- identifying a lease
- initial recognition and measurement
- subsequent measurement
- concessionary leases (lessees only)
- lessor accounting
- sale and leaseback transactions
- consequential amendments – Service Concession Arrangements (PFI/PPP)
- effective date
- further guidance
Additionally, CIPFA/LASAAC welcome feedback and information on the practical implications that implementation of the proposals has for local government bodies. They have therefore requested responses to a readiness assessment questionnaire in relation to IFRS 16 Leases.
The invitation to comment, exposure draft of proposed changes and readiness assessment can be found within the press release on the CIPFA website.
Comments are requested by 7 September 2018.
