William Eichler 17 October 2023

Councils' readiness to adopt new accounting standards questioned

Councils readiness to adopt new accounting standards questioned image
Image: Vitalii Vodolazskyi / Shutterstock.com.

Doubts have been raised over the readiness of local authorities to adopt international accounting standards.

Responding to a consultation on the update to the Code of Practice on Local Authority Accounting for 2024/25, the Association of Chartered Certified Accountants (ACCA) has said that greater understanding is required of the readiness of councils in adopting IFRS 16 on accounting for leases.

The ACCA highlights the need for a collaborative approach given local challenges, such as complex regulatory landscapes, constraints of resources, and the financial stability of certain councils.

Glenn Collins, head of Technical and Strategic Engagement, ACCA said: ‘In the face of limited resource constraints – including staff shortage and spending cuts – the potential repercussions of local authorities adopting IFRS 16 may be that timely reporting is unfeasible.'

Jessica Bingham, Regional Lead, Policy & Insights, ACCA said: ‘It would be good to see the incorporation of guidance on how local authorities’ financial statements can be better presented digitally in order to amplify transparency.’

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