IFRS 16 for the public sector in the UK

In this webinar, Danielle Stewart OBE, Partner, Head of Financial Reporting at RSM UK offer a hands-on guide to implement and manage IFRS 16 in the public sector. The webinar will focus on professional accounting challenges as well as more technical issues regarding contract management, calculations, and reporting.

Keywords are Government Financial Reporting Manual (FReM), Department of Health and Social Care Group Accounting Manual (GAM), and the Code of Practice on Local Authority Accounting (Codes). 

How to manage IFRS 16 in the public sector?

Since April 1st 2022, the IFRS 16 standard has applied to the public sector in the United Kingdom. IFRS 16 is professionally demanding and requires a lot of work from finance teams. What exactly are the challenges at hand, and how should they be approached?

How and when does IFRS 16 apply to the public sector?

What are the differences between IFRS 16 and the upcoming public sector requirements for lease accounting? What are the general requirements under IFRS 16, including the recognition of ROU (right-of-use) and lease liabilities.

Keywords are Government Financial Reporting Manual (FReM), Department of Health and Social Care Group Accounting Manual (GAM), and the Code of Practice on Local Authority Accounting (Codes).

We will explain the major differences between IFRS 16 itself and the principles as contained in the FReM (and by extension the GAM).

Examples include:

• The choice between the cost and revaluation model in the subsequent measurement of right-of-use assets is removed and the revaluation model must be applied.

• For peppercorn leases, a right-of-use asset will have to be recognized and measured at current value in existing use or fair value.

• If the interest rate implicit in the lease cannot be readily determined, the FReM provides a useful practical alternative. 

• The FReM and the GAM also make modifications to the transitional provisions of IFRS 16.