CIPFA/LASAAC consults on a new Code of Practice on Local Authority Accounting

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24 Sep, 2020

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 for developing the 2021/22 Code of Practice on Local Authority Accounting in the UK (the Code) which would apply to accounting periods beginning on or after 1 April 2021.

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 (CIPFA/LASAAC).

The changes and feedback requested in the Invitation to Comment (ITC) relate to the following:

  • Further developments on the implementation of IFRS 16 Leases including:
    • the treatment of housing revenue account tenancy agreements under leasing standards.
    • the measurement of the service concession arrangement liability.
    • the accounting requirements for leases at peppercorn (or lease payments for nominal or nil consideration), by following the principles in the Code for the treatment of donated assets.
    • changes to IFRS 16 for COVID-19 related rent concessions issued by the IASB in May 2020.
  • Other changes to accounting standards.
  • Areas of augmentation to the Code’s provisions.

CIPFA/LASAAC consulted on the implementation plans for IFRS 16 in 2018 and 2019.  It is noted that the agreed text might be subject to change pending the outcome of the issues identified above.  The ITC does not specifically re-expose the proposals to consultation.

CIPFA/LASAAC are also consulting on:

  • the impact of the Redmond Review recommendations and commentaries on financial reporting and CIPFA/LASAAC’s strategic plan.
  • the future implementation of IFRS 17 Insurance Contracts
  • specific issues relating to CIPFALASAAC’s strategic plan.

Comments are requested by 23 October 2020.

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