Introduction of IFRS 16 Accountancy Regulation for Schools
A new Accountancy regulation is due to be introduced in to Schools. IFRS 16 came into effect on 1 January 2019. However, for UK public bodies that use IFRS accounting standards, the adoption date was deferred until the financial year beginning 1st April 2020. Due to the situation surrounding Covid-19 this date has been further pushed back to 1st April 2022.
Confirmation of its impact is awaited, but in theory it may make all asset leases accounted for as borrowing. This conflicts with the regulations which bar maintained schools from borrowing unless special permission is granted. Likewise, it also conflicts with the Academies Handbook, although it is yet to be confirmed whether IFRS16 will apply to Academies, as they have Charitable Status.
We have asked for clarification and will issue updates as we receive them.
Contact Us if you need help with your lease agreements.