Capital Hot Topics 2017


2017 Capital Hot Topics Series

This autumn FAN series was aimed at practitioners looking to build on their existing knowledge of capital accounting and financing, and focused specifically on a number of topical and emerging issues impacting on local authority capital and asset activities, as well as revisiting some well-established areas that regularly crop up as areas of uncertainty for practitioners. 

In terms of the emerging topics, the day considered the likely accounting implications for Cloud-based IT solutions, summarised the latest Prudential Code consultation discussions and likely changes to feed through to the revised Code, and also considered the new leasing standard (IFRS 16) and what it might mean for local authorities in coming years. In terms of the more established areas of capital and asset accounting, the programme reviewed the Code’s requirements for investment properties (something which is increasingly being seen as part of the solution to austerity funding cuts), considered the requirements for Minimum Revenue Provision policies in the context of addressing an authority’s Capital Financing Requirement, and worked through the accounting and practical considerations for asset valuations.

Beyond the main technical update, the programme also considered the practical application of the Code, exploring the important role of the capital accountant in today’s local authorities and highlighting the essential links between capital and treasury management, together with an overview of the treasury function. The various topics were explored using illustrative examples and practical exercises, designed to reinforce the learning and to provide useful reference material to assist practitioners with the future application of capital accounting and financing in practice. The exercises and suggested answers can be accessed from this page.

Please note that there was a small change to one of the Prudential Indicator slides in the original delegate slide pack, as the Net Debt <= CFR Actuals indicator in the 2011 Prudential Code was amended to Gross Debt in an update to the Code in November 2012). In terms of the likely changes to the Prudential Code, the proposals set out in the slides were largely supported by CIPFA’s Treasury and Capital Management Panel at its meeting on 30 October, and details of the consultation outcomes are expected to be confirmed shortly, including the timelines for adopting the changes. Finally, a few delegates questioned whether cloud-based contracts might meet the definition of a lease under IFRS 16 – to clarify, what would need to be assessed is whether or not the arrangements would amount to control of a particular asset or assets under the new requirements for identifying a lease under IFRS 16.


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