The ACCA has supported proposed changes to UK local authority financial reporting, saying they could make council accounts more understandable for their primary users.
The proposed changes are contained in the 2027/28 Code of Practice on Local Authority Financial Reporting in the UK, published by the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Local Authority (Scotland) Accounts Advisory Committee (LASAAC).
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Under the proposals, local authorities would publish an Accountability Report alongside their financial statements.
The report would provide information on a funding basis, while the financial statements would be more closely aligned with International Financial Reporting Standards (IFRS).
The ACCA said the Accountability Report should include a reconciliation between the authority’s income and expenditure on a funding basis and its income and expenditure on an IFRS basis if the proposals are adopted.
It added that this would help users understand the differences between the two approaches used in local authority finances.
The analysis would be similar to the Statement of Outturn Against Parliamentary Supply used in central government reporting.
ACCA Public Sector head Michael Surman said: “The proposed reforms are comprehensive in addressing the key financial reporting challenges that local authorities in the UK are facing.
“We support the focus on longer-term financial reporting reform and the work of the Better Reporting Group, recognising the importance of ensuring that the Code remains relevant to the evolving needs of users of local authority accounts.”
The ACCA has also called on the CIPFA and LASAAC to take a coordinated, strategic approach to developing new sustainability reporting requirements, ensuring that they remain proportionate and provide meaningful information.
