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New Accounting Standards and Review of Accounting Policies

Meeting: 29/01/2020 - Audit Committee (Item 432)

432 New Accounting Standards and Review of Accounting Policies pdf icon PDF 128 KB

To receive a report, ATTACHED, setting out the new accounting standards and review of accounting policies as a result of the Chartered Institute of Public Finance and Accountancy (CIPFA) Service Reporting Code of Practice for Local Authorities 2019/20.

Additional documents:

Minutes:

The Committee received a report updating on changes since the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice for 2019/20.  There were fewer changes compared to previous years with additional clarifications over areas such as accounting for apprenticeship levy which the Council had already implemented in the 2018/19 financial year.

 

CIPFA and EY have provided updates to (International Financial Reporting Standard) IFRS16 with regards to the treatment and designation of leases.  IFRS 16 will be introduced in the 2020/21 Code of Practice for accounting periods beginning 1 April 2020.  This would have potential implications where “embedded leases” existed, for example where there was a partnership agreement to provide a service and the lease contract could be passed back to the council should the agreement cease.  It had been recognised that this would lead to additional work.

 

It was recommended that the Council’s current accounting policies were retained except where they were affected by the changes in the Code of Practice 2019/20 and referred to throughout the report.

 

RESOLVED that:

1.    That the Audit Committee note the key accounting changes and implications of the revised 2019/20 edition of the CIPFA Code of Practice (as set out in report paragraph 5.1 of the report).

2.    Agree to amend the existing Accounting Policy Statement included in Appendix 1 to reflect the changes in accounting for financial instruments and income recognition.

3.    That the Audit Committee notes the updates on IFRS 16 lease accounting which is scheduled to commence for the accounting period beginning 1 April 2020 and

4.    That the Audit Committee agrees that in all other respects the existing accounting policies remain unchanged for the purposes of the 2019/20 Statement of Accounts.