Let’s be clear: Making local authority IFRS accounts more accessible and understandable
18 January 2012
This briefing focuses on a long-running debate that the implementation of International Financial Reporting Standards has revived: how to make local government accounts easier to understand.
While the statutory accounts give comprehensive information on each local authority’s financial position and performance, reflecting the range of activities which they cover, they are a poor way of communicating information to lay readers. Elected members and local people need accessible and clear information on financial performance, without needing to be accountants.
The briefing concludes by identifying possible steps to make local authority accounts more accessible and easier to understand, and the implications of doing so.
The final countdown: IFRS in local government
17 March 2011
This is the final briefing paper in our countdown to IFRS series, reporting on findings from a January 2011 auditor survey on implementation of IFRS in local government. It covers IFRS implementation in councils, police authorities and fire and rescue authorities.
Our overall message is that even those authorities with issues to resolve still have time to implement IFRS successfully, if they take appropriate action. However, they need to act now, as problems that arise later in the final accounts period may lead to added costs for the authority or material errors in draft accounts.
IFRS: reporting on operating segments
29 October 2010
This paper covers principles and practical issues that authorities should consider when reporting on operating segments, and addresses questions such as: what are operating segments?; which operating segments should be reported separately? and what issues do local authorities need to consider?
We hope that this briefing paper will help local authorities and their finance teams to undertake preparatory work for the transition to IFRS, including work on the restatement of prior year accounts and skeleton accounts for 2010/11.
International Financial Reporting Standards: Progress on the transition to IFRS
5 October 2010
This paper draws on a survey completed in July 2010 by auditors of all local authorities, fire and rescue authorities, and police authorities, on local government’s progress on transition to IFRS.
IFRS: accounting for employee benefits
15 July 2010
This briefing paper looks at the practical issues that authorities may face when accounting for employee benefits. In particular it considers issues arising from accounting for short-term compensated absences and long-term disability benefits.
IFRS: restating non-current assets
17 June 2010
We investigate the problems that can arise for authorities when it comes to identifying, locating and accounting for non-current assets, and how these issues can be tackled. The paper looks at ways you can identify what assets you are using, decide if you need to account for an asset and account for significant components of assets.
IFRS: Summary paper
8 June 2010
This summary paper gives an outline of the main messages for members and senior managers to consider in implementing IFRS in their authorities.
Authorities need to plan and carry out detailed work to implement International Financial Reporting Standards (IFRS) successfully by the statutory deadline.
Local authorities will prepare their Statements of Accounts under the new IFRS based Code of Practice on Local Authority Accounting from 2010/11. The move to IFRS does not mean wholesale change, but where changes do occur, a significant amount of work is needed to assess the impact on the accounts. Much of that work needs doing now as the 2009/10 accounts will need to be restated to provide the prior year balances in the 2010/11 accounts.
IFRS: Accounting for non-current assets
17 May 2010
In this issue of our series of technical briefing papers, we look at the potential issues arising from introducing international financial reporting standards for accounting for non-current assets. We provide practical examples to help explain potential issues local government bodies may experience when implementing the standards.
IFRS: Identifying and accounting for leases
17 March 2010
This first IFRS briefing paper looks at the issues arising from the introduction of International Accounting Standard (IAS) 17: Leases. In our November 2009, survey, auditors assessed only 14 per cent of authorities as on track to deliver IFRS financial statements compliant with IAS 17 for 2010/11. Twenty-seven per cent were assessed as having major issues and 59 per cent with minor issues.
IFRS: Checklist for councillors
17 March 2010
Failure to achieve successful transition to IFRS would cause significant reputational damage not only to individual authorities but to the local government sector as a whole.
Poor preparation will heighten the risk that accounts will not meet requirements and so attract a qualified auditor's opinion or be published late. At a practical level, there is a risk that avoidable additional costs will be incurred if the implementation timetable is not well managed or is allowed to slip. The transition process is a real test of self regulation by local government.
The audit committee (or its equivalent) needs to be sufficiently aware of the requirements of IFRS to ensure the transition project is on track. In order to help members discuss their IFRS transition plan with relevant officers we have set out a number of suggested questions.
Countdown to International Financial Reporting Standards (IFRS)
19 February 2010
Countdown to IFRS is based on a comprehensive survey of the auditors of all local authorities, fire and rescue authorities and police authorities in November 2009. Auditors reported that only one in seven authorities was 'on track', and one in five was having serious difficulties.
Managing the transition to IFRS
4 May 2009
The third International Financial Reporting Standards (IFRS) briefing paper considers what local government bodies should be doing now as they prepare for the transition to IFRS and also highlights what we consider to be the most significant issues that authorities will have to address as the new standards take effect. The transition to IFRS will require careful planning and can have significant resourcing implications.
IFRS: How can your auditor help?
1 September 2007
In our second IFRS briefing paper, we outlined our commitment that appointed auditors would provide support to audited bodies as they address the transition to international financial reporting standards (IFRS), by informing and commenting on the arrangements being put in place.
IFRS: The move to international financial reporting standards
1 May 2007
The move to IFRS in local government is at an early stage. However, the adoption of IFRS has significant implications for the way in which local government bodies prepare their annual financial statements. The Audit Commission is committed to helping local government bodies keep up to date with these developments. This is, therefore, the first of what will be a series of briefings, aimed at the preparers of accounts, that will address developments in the application of IFRS.
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