HM Treasury issues new financial reporting manual (FReM)

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18 Dec 2021

HM Treasury has issued a revised version of the government financial reporting manual (FReM) 2022-23.

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, Scotland and Northern Ireland. The FReM is prepared following consultation with the Financial Reporting Advisory Board (FRAB) and is issued by the relevant authorities who are:

  • HM Treasury
  • the Welsh Government
  • the Scottish Government
  • the Executive Committee of the Northern Ireland Assembly
  • the Department of Health and Social Care
  • CIPFA/LASAAC

The FReM applies directly 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, NHS Foundation Trusts and Clinical Commissioning Groups.

The FReM is separated into five sections:

  • Part A: Purposes, principles and best practice
  • Part B: Form and content of government annual reports and accounts
  • Part C: Application of accounting standards for government annual reports and accounts
  • Part D: Further guidance for government annual reports and accounts
  • Part E: Additional guidance

Changes made to the FReM include changes in guidance for the adoption of IFRS 16 Leases in the public sector.

The latest version of the FReM is available on the HM Treasury website.

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