Circulars

16-16 – Final Code of Accounting Practice and Financial Reporting (update 24)

What’s new or changing

  • The final Code of Accounting Practice and Financial Reporting (Code) (update 24) is now available for use by councils in preparation of their 2015/16 financial statements.
  • Within the document, changes highlighted in yellow are new for this year, commentary in red relates to Office of Local Government requirements and commentary in blue relates to the Australian Accounting Standards.

What this will mean for your council

  • The Code is required to be used by councils in the preparation of their annual financial statements as per the Local Government Act 1993 and the Local Government (General) Regulation 2005.

Key points

  • Fundamental changes in this year’s Code were highlighted in Circular 16-04.
  • The key changes between the draft and the final Code, following feedback, provide more clearly defined requirements and commentary in relation to:
    • Note 4 – Expenses from continuing operations
    • Note 9 – Infrastructure property plant and equipment
    • Note 20 – Retained earnings, revaluation reserves, changes in accounting policies, changes in accounting estimates and errors.
    • Note 27 – Fair value measurement
    • Special Schedule 7 (SS7) – Report on Infrastructure Assets.
    • draft Note 28 has been deleted and required disclosures are now reported in Note 20.
  • SS7 will not be audited in the 2015/16 financial yearThe auditing of SS7 will be the subject of further sector consultation.
  • The illustrated financial statements within the Code refer to the year-end date for existing councils as at 30 June 2016. New councils preparing financial statements for former councils will have a year-end date in accordance with the Proclamation amalgamation date as at 12 May 2016.
  • Existing councils are required to submit their financial statements on or before 31 October 2016. New councils are required to submit the financial statements of the former councils on or before 31 December 2016.
  • A Code supplement is being prepared for issue to new councils providing additional guidance in preparing financial statements for the former councils for the period from 1 July 2015 to 12 May 2016.

Where to go for further information

  • The Code (update 24) is available on the OLG website at:

https://www.olg.nsw.gov.au/strengthening-local-government/supporting-and-advising-councils/accounting-practice

Tim Hurst
Acting Chief Executive