Academies Accounts Direction 2017
This year’s Academies Accounts Direction (AAD) was released by the ESFA on 12 June 2017. There are few changes this year, with the only significant one being in relation to church schools where their land & buildings are owned by the Diocese.
A full version of the Academies Accounts Direction 2016 to 2017 can be found here
Transfer of existing Academies
- Transfer of new academies should be accounted for when risks and rewards of ownership are transferred. This should be the date the transfer agreement is signed.
- Where existing academies have joined the trust in the year, a detailed note should disclose the acquired assets and liabilities.
- The ESFA expects both sides of the transfer to present similar disclosures and that they should formally agree the value of the transferred balance sheet.
Accounting for Land & Buildings – church schools
The guidance for church schools accounting for land & buildings has been amended and clarified. Academies that convert from a former voluntary church school usually have a licence to occupy the land & buildings, which are owned by the diocese. This is different to academies with land & buildings owned by the LA, which are on a 125 year lease. The key issue that a church academy trust must consider under a licence to occupy is whether it should recognise a fixed asset on its balance sheet. In the past academies have been inconsistent with this treated, with some recognising them as assets on the balance sheet and others not.
The AAD 2017 concludes that where academy trusts do not have control over the premises, either because the church has a right to determine access or because the church has to give consent for capital works, the premises should not be shown as an asset of the academy trust. All trusts with church schools with a licence to occupy should discuss this with their auditors and consider whether any previously capitalised land & buildings need to be removed from the balance sheet of the trust.
Accounts for new Academy Trusts
Previously Academy Trusts incorporated on or after the 1 March could defer their first accounts to the following 31 August. This option has now been removed and all academies open as at 31 August must prepare accounts to that date.
The apprenticeship levy was introduced in April 2017 and requires all employers with paybills over £3million to contribute 0.5%, subject to a £15,000 allowance. The funds are held by the government and can be assessed for training of apprenticeships. The AAD requires the levy to be treated as expenditure in the SOFA and disclosed in the staff costs note.