Chartered Institute of Public Finance and Accountancy (CIPFA) Public Sector Financial Reporting Syllabus

Public Sector Financial Reporting syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Public Sector Financial Reporting in Chartered Institute of Public Finance and Accountancy (CIPFA), not a summary of it.

1. 1

   Whole of Government and Local Authority Accounts

   3 topics

   • The CIPFA/LASAAC Code of Practice on Local Authority Accounting
     • Status and authority of the Code
     • Statutory overrides and accounting adjustments
     • The Movement in Reserves Statement
   • Whole of Government Accounts Consolidation
   • Statutory Statements of Accounts
     • Comprehensive Income and Expenditure Statement
     • Balance Sheet and usable/unusable reserves
     • Cash Flow Statement for authorities
2. 2

   International Public Sector Accounting Standards (IPSAS)

   4 topics

   • The IPSAS Framework and IPSASB
     • Accrual versus cash basis IPSAS
     • Conceptual framework for public sector entities
   • Revenue from Non-Exchange Transactions
     • Taxes and transfers recognition
     • Conditions and restrictions on transfers
   • Service Concession Arrangements
     • Grantor accounting for PFI and PPP
     • Recognition of service concession assets and liabilities
   • Convergence Between IPSAS and IFRS
3. 3

   Group and Entity Accounts in the Public Sector

   3 topics

   • Defining the Group Boundary
     • Control and the public sector reporting entity
     • Subsidiaries, associates and joint arrangements
   • Consolidation Procedures
     • Goodwill and non-controlling interests
     • Eliminating intra-group transactions
   • Accounting for Pension Schemes and Liabilities
4. 4

   Specialist Public Sector Reporting Issues

   3 topics

   • Heritage Assets and Infrastructure Assets
   • Charging for Capital and the Capital Adjustment Account
   • Narrative Reporting and the Annual Governance Statement

Public Sector Financial Reporting flashcards for Chartered Institute of Public Finance and Accountancy (CIPFA)

18 of 51 cards from the Public Sector Financial Reporting deck — real questions with worked answers.

1. What is the full title and statutory basis of the "Code" that governs local authority accounting in the UK?

   The Code of Practice on Local Authority Accounting in the United Kingdom, prepared by the CIPFA/LASAAC Local Authority Accounting Code Board. It is recognised as a "proper accounting practice" under section 21(2) of the Local Government Act 2003, making compliance a statutory requirement.

2. What does the acronym LASAAC stand for, and what is its role?

   Local Authority (Scotland) Accounts Advisory Committee. Together with CIPFA it forms the CIPFA/LASAAC Board, the body responsible for preparing and maintaining the Code of Practice on Local Authority Accounting.

3. On which accounting frameworks is the CIPFA/LASAAC Code primarily based?

   International Financial Reporting Standards (IFRS) as adapted for the public sector, drawing also on IPSAS and UK GAAP/FRS 102 where IFRS does not address a public-sector-specific issue. It interprets and adapts these for the local authority context.

4. What is the "hierarchy" the Code instructs preparers to follow when an issue is not covered by the Code itself?

   Preparers follow, in order: (1) the Code, (2) International Financial Reporting Standards and interpretations, (3) International Public Sector Accounting Standards (IPSAS), and then other relevant guidance, applying the most relevant and reliable treatment.

5. What are Whole of Government Accounts (WGA)?

   A consolidated set of financial statements for the entire UK public sector, prepared by HM Treasury under the Government Resources and Accounts Act 2000. WGA consolidates central government, devolved administrations, local government, the NHS, and public corporations into a single "group" account based on IFRS.

6. Which accounting framework underpins the preparation of Whole of Government Accounts?

   IFRS as adapted and interpreted for the UK public sector context (the Government Financial Reporting Manual, FReM), rather than the local authority Code directly. Bodies submit data that is converted to a consistent IFRS basis for consolidation.

7. In WGA, how are transactions between public sector bodies treated on consolidation?

   They are eliminated. Intra-group balances, transactions, income and expenditure between consolidated public sector entities (e.g. grants between departments and councils) are removed so that only transactions with parties outside the public sector boundary remain.

8. What is the WGA "counter-party" (CPID) data collection process used for?

   Bodies report intra-government transactions and balances tagged with a Counter-Party Identifier (CPID) so that HM Treasury can match and eliminate matching amounts between entities during consolidation, identifying and resolving mismatches.

9. What is the statutory "Statement of Accounts" that an English local authority must publish each year?

   A set of financial statements prepared in accordance with the Code and the Accounts and Audit Regulations, comprising the core single-entity (and where relevant group) statements together with notes, approved and published by a statutory deadline.

10. List the core financial statements required in a local authority Statement of Accounts.

    (1) Comprehensive Income and Expenditure Statement (CIES); (2) Movement in Reserves Statement (MiRS); (3) Balance Sheet; (4) Cash Flow Statement. These are supported by the notes and, where applicable, group statements.

11. What is the purpose of the Comprehensive Income and Expenditure Statement (CIES)?

    It records the accounting cost of providing services in the year in accordance with generally accepted accounting practices (proper practices), rather than the amount funded from taxation. Surplus/deficit on services is shown gross of statutory adjustments.

12. What is the purpose of the Movement in Reserves Statement (MiRS)?

    It shows the movement in the year on the different reserves held by the authority, analysed into "usable reserves" (those that can fund expenditure or reduce taxation) and "unusable reserves", and reconciles the accounting basis (CIES) to the funding basis (the General Fund Balance).

13. Distinguish "usable" from "unusable" reserves in local authority accounts.

    Usable reserves can be applied to fund expenditure or reduce council tax (e.g. General Fund Balance, Capital Receipts Reserve, earmarked reserves). Unusable reserves arise from accounting adjustments and cannot be used to fund services (e.g. Revaluation Reserve, Capital Adjustment Account, Pensions Reserve).

14. What does IPSAS stand for and who issues these standards?

    International Public Sector Accounting Standards, issued by the International Public Sector Accounting Standards Board (IPSASB), which operates under the auspices of the International Federation of Accountants (IFAC).

15. What are the two bases of accounting addressed by IPSAS pronouncements?

    Accrual-basis IPSAS (a full suite of standards largely converged with IFRS) and the Cash Basis IPSAS (a single standard for entities reporting on a cash basis, often used by developing-country governments transitioning to accrual).

16. What is the IPSASB Conceptual Framework's stated objective of public sector financial reporting?

    To provide information useful for accountability and decision-making. It emphasises stewardship/accountability of resources entrusted to the entity, reflecting the non-exchange (taxation) nature of much public sector activity, alongside decision-usefulness.

17. Name the qualitative characteristics of information in the IPSASB Conceptual Framework.

    Relevance, faithful representation, understandability, timeliness, comparability and verifiability. They are subject to the constraints of materiality, cost-benefit, and achieving an appropriate balance between the characteristics.

18. Which IPSAS deals with Revenue from Non-Exchange Transactions, and what does "non-exchange" mean?

    IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers). A non-exchange transaction is one in which an entity receives value (e.g. taxes, grants, fines, donations) without directly giving approximately equal value in exchange.

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