Code of Practice on Local Authority Accounting in the United Kingdom 2016/17

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This Code is prepared under International Financial Reporting Standards (IFRS), which have been adopted as the basis for public sector accounting in the UK. The 2016/17 Code has been developed by CIPFA/LASAAC and has effect for financial years commencing on or after 1 April 2016.




Apr 2016



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Local authorities in the United Kingdom are required to keep their accounts in accordance with ‘proper (accounting) practices’. This is defined, for the purposes of local government legislation, as meaning compliance with the terms of the Code of Practice on Local Authority Accounting in the United Kingdom (the Code).

The Code specifies the principles and practices of accounting required to prepare a Statement of Accounts which gives a true and fair view of the financial position and transactions of a local authority. The Code is updated annually.

This 2016/17 edition of the Code introduces new, or amended, accounting standards or reporting requirements in a number of areas, in particular:

  • The introduction of a new section specifying the revised measurement requirements at Depreciated Replacement Cost for the Highways Network Asset based on the methodologies in the CIPFA Code of Practice on Transport Infrastructure Assets.


  • The Code also includes changes resulting from the Telling the Story Review on improving the presentation of local authority financial statements. These include new formats and reporting requirements for the Comprehensive Income and Expenditure Statement and the Movement in Reserves Statement and the introduction of the new Expenditure and Funding Analysis.


  • Amendments to the Accounting and Reporting by Pension Funds section of the Code, following its review by CIPFA/LASAAC.


  • Following the changes introduced in the Update to the 2015/16 Code, amendments to reflect the new requirements in the Accounts and Audit Regulations 2015 for English authorities for a narrative statement.


  • Amendments arising from the narrow scope amendments to IFRS including changes to IAS 1 Presentation of Financial Statements under the International Accounting Standards Board Disclosure Initiative.

The Code includes confirmation (following confirmation in the Update to the 2015/16 Code) of changes as a result of the Accounts and Audit Regulations 2015 for English authorities and the Local Government (Accounts and Audit) Regulations (Northern Ireland) and minor amendments to reflect the introduction of Scottish Government Statutory Guidance on Accounting for Equal Pay and Severance.

The Code applies formally in Great Britain to local authorities, fire authorities (England and Wales), joint committees and joint boards of principal authorities. In Northern Ireland it applies to all district councils. The Code also applies to police and crime commissioners and other police bodies, as relevant.

In England and Wales, Code constitutes ‘proper (accounting) practice’ under the terms of section 21(2) of the Local Government Act 2003. In Scotland, the Code constitutes proper accounting practice under section 12 of the Local Government in Scotland Act 2003. In Northern Ireland, the status and authority of the Code derives from regulation (2) the Local Government (Capital Finance and Accounting) Regulations (Northern Ireland) 2011 of the Local Government (Accounts and Audit) Regulations (Northern Ireland) 2006 and through the relevant accounts direction issued by the Department of the Environment (Northern Ireland).

The Code is available in hard copy and online.

The digital, online version is available as both searchable HTML and a bookmarked downloadable PDF of the publication that can be shared throughout your organisation.

Details of licensing arrangements for other categories of purchaser, which includes those organisations operating shared service arrangements, are available from CIPFA’s Publications Department.

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