Asset Decommissioning Obligations Guidance on Accounting


LASAAC has provided guidance on the application of the accounting requirements for asset decommissioning obligations. LASAAC's work indicated that there would be potentially significant funding implications for some authorities in applying this guidance and consequently requested statutory mitigation. The Scottish Government agreed to this request. A copy of the mitigation (Finance Circular 8/2014) is included as an appendix in the guidance.

Authorities should note that:

  • this guidance may apply to a wide variety of assets, including landfill sites
  • the accounting guidance indicates that the Capital Financing Requirement will increase when the asset historic cost is increased due to the recognition of a provision. Authorities should consider the impact of this on their cash management arrangements as indicated in the guidance
  • the statutory mitigation has specific criteria and time limits. Authorities may wish to review the requirements and reflect the the application of the mitigation in their financial planning forecasts


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