Chartered Institute of Public Finance and Accountancy

UK public benefit sector standard setting

Central government and the health sector; local government from 2010-11

Central government financial reporting is determined by reference to GAAP as interpreted and adapted for the public sector. From 2009-10, this will reflect GAAP based on suitably adapted International Financial Reporting Standards (IFRS).

Guidance is published by HM Treasury in the Government Financial Reporting Manual (FReM - www.hm-treasury.gov.uk/frem_index.htm).

Changes to the FReM are subject to review by the Financial Reporting Advisory Board (FRAB - www.hm-treasury.gov.uk/psr_frab_index.htm).

This guidance also applies to financial reporting by the devolved administrations, and is reflected in similar guidance for the health sector produced by the Department of Health (www.dh.gov.uk) and Monitor (www.monitor-nhsft.gov.uk).

Local government reporting from 2010-11 will use the IFRS-based Code developed by CIPFA / LASAAC (www.cipfa.org.uk/pt/cipfalasaac/index.cfm) and subject to the FRAB review process.

Charities, housing and education

For other parts of the public benefit sector, UK GAAP is interpreted through Statements of Recommended Practice (SORPs). Approved SORP making bodies for relevant sectors are as follows:

Charities: the Charity Commission and the Office of the Scottish Charity Regulator (OSCR) joint SORP-making body for charities in the UK. (www.charity-commission.gov.uk and www.oscr.org.uk/)

Registered Social Landlords: RSL SORP making body comprising the National Housing Federation (www.housing.org.uk/) and its Scottish (www.sfha.co.uk) and Welsh (www.chcymru.org.uk) counterparts.

Further and Higher Education: Universities UK (www.universitiesuk.ac.uk)

SORP proposals are reviewed by the ASB Committee on Accounting for Public-benefit Entities. CIPFA has direct input into the development of the Local Authority SORP, and CIPFA technical panels provide input to other SORP consultations.

The ASB has issued several consultations on the future of UK GAAP, and is currently developing proposals for UK standards based on IASB standards. These are expected to include a public benefit standard and SORPs based on suitably interpreted IASB guidance.