Agenda item

The council is required to adopt accounting policies each year to set out how the Statement of Accounts will be produced. This paper provides the proposed Accounting Policies for the production of the 2019/20 Statement of Accounts.

Ward Affected:                                  Contact Officer:

All wards                                            Ben Ainsworth, Head of Finance

                                                            Email: Benjamin.ainsworth@brent.gov.uk

                                                            Tel:     020 8937 1731

Ben Ainsworth (Head of Finance) introduced the report seeking the Committee’s approval to the accounting policies it would be required to adopt governing production of the Statement of Accounts. The Accounting Policies, detailed in Appendix 1 of the report, had been based on the previous year’s policies with some minor changes to cover new accounting standards and clarify existing policies.  The Committee noted that the accounting policies could be changed only in specific circumstances, which had been outlined in paragraph 3.3 of the report with the main update relating to the additional disclosures now required under IFRS16 in relation to the accounting for leases (summarised within section 3.5 of the report).

Members in welcoming the report raised the following issues:

·                Further details were sought on the potential impact, which the changes being introduced under IFRS 16 were likely to have in relation to the Statement of Accounts.  Whilst the additional disclosures required were likely to impact on the Council’s overall balance sheet, this was not expected to be to a material extent.  Officers were in the process of undertaking a detailed review in order to include a disclosure of the estimated impact within the 2019/20 accounts.  Paul Dossett advised that Grant Thornton had also been working with the Council to assess the approach adopted, with was regarded as a robust process.

·                Members were also keen to seek a view on the approach being adopted in relation to the valuation of assets more generally in relation to the Statement of Accounts. By way of assurance, Paul Dossett advised that Grant Thornton had engaged their own Independent Valuer to review the Council’s instruction process to their valuation expert along with the valuation, methodology and approach adopted in order to test the information, assumptions (including the current state of the property market), completeness and consistency of the valuation process.  The process followed in previous years had been assessed as robust and whilst the approach adopted by Grant Thornton had changed for the current year, this had been subject to ongoing and early discussion to ensure the final process was understood and agreed.

·                Clarification was sought on the valuation process followed in relation to Council dwellings, which it was noted had been based on the beacon principle and use of their open market value adjusted to reflect their value as social housing.  In response, Daniel Omisore (Deputy Director of Finance) confirmed that the valuation process would only include Council owned property valued according to the social housing discount.  Any properties sold under Right to Buy would not be recognised.  Paul Dossett advised that the external audit focus would remain on the data being used to identify the sample dwellings under the beacon principle and identification of non-council housing assets rather than on the level of social housing discount rate applied.

As no further issues were raised, it was RESOLVED that:

(1)      The contents of the Accounting Policies report, be noted; and

(2)     The Accounting Policies set out in Appendix A be approved as the basis for the production of the 2019/20 Statement of Accounts.