Responding to COVID-19: insight, support and guidance
The CIPFA LASAAC Local Authority Code Board has announced an urgent consultation on temporary proposals to update of the Code of Practice on Local Authority Accounting in the United Kingdom for infrastructure assets.
The proposals are intended to address issues raised by auditors in relation to the derecognition (removal of the carrying amount) of parts of infrastructure assets when replacement expenditure is undertaken. The issue arises principally because of information availability, relating to these assets and the difficulty of generating information which is decision useful and meets the needs of accounting standards. There are also related issues for the reporting of gross historical cost and accumulated depreciation.
CIPFA LASAAC and CIPFA's Accounting and Financial Reporting Forum have established a Task and Finish Group to assist with the resolution of this issue and consider the consequences of the proposals.
The issue is a complex, technical accounting issue. Following the advice of the Task and Finish Group, CIPFA LASAAC has proposed a temporary solution, with changes to the code for the reporting including proposals to:
This temporary solution will allow CIPFA LASAAC to consult on a longer-term solution later in the year.
The invitation to comment (ITC) discusses the background to the issues and the proposed changes to the code. Annex one includes an exposure draft which presents the changes.
The invitation to comment (ITC) discusses the background to the issues and the possible changes to the code. Annex one includes an exposure draft which presents the changes.
Interested parties are invited to provide responses to questions in the invitation to comment (ITC), preferably in electronic format. Where CIPFA/LASAAC is interested in specific issues, consultation questions have been included in the ITC. In order to assess responses properly CIPFA/LASAAC would prefer respondents to support comments with clear accounting reasons and, where applicable, explanations of practical effects.
The consultation period will be four weeks. It will close at 23.00 on Tuesday 14 June 2022. Please note that timescales for any possible changes arising from this consultation are very short. Unfortunately, it will not be possible to add any extensions to this date due to its urgent nature.
Please make responses by email to firstname.lastname@example.org
A panel of experts discussed the proposals in a webinar on the 26 May.