Financial statements vs Accounts return – differences to be aware of

The Education and Skills Funding Agency (ESFA) has recently released a document that outlines the key differences between the financial statements and the academies account return (AAR) for the period ending 31 August 2018.

The document introduces additional information that trusts are now required to report on and also lists a number of historical differences between the financial statements and the AAR. The reason for the document being released in advance of the 2017/18 period-end is so that trusts can plan ahead for the AAR when they are preparing their financial statements.

New information to be reported

In addition to the information supplied last year, there are four new requirements introduced for the 17/18 AAR:
 
  • trusts will need to disclose the number of employees whose annualised full time emoluments exceed £100k, along with the job role and the full time equivalent (FTE) position of the role;
  • gender analysis will need to be calculated on an average FTE basis, rather than the FTE basis solely at the period end date;
  • related party transactions will need to be reported in smaller sections (£0-£2,500, £2,501-£10,000, £10,001-£20,000, £20,001-£50,000). Last year, the smallest section was £0-£50,000; and
  • trusts will need to disclose the number of control issues raised in their audit findings report that have been assigned the highest priority and, also, if there are any unresolved high priority issues from the previous audit. External auditors will be asked to confirm this as part of their approval stage.
Financial statements and the AAR - differences

The guidance goes on to provide a detailed comparison between the information that is included within the financial statements, prepared in accordance with the academies accounts direction, and the requirements of the AAR.

The comparison table in the guidance splits the differences between either ‘detailed breakdown’, whereby figures in the financial statements are required to be split into more detail, or ‘additional information’, where information is required beyond that which is included in the financial statements.

Although there are 28 separate areas identified as requiring detailed breakdown or additional information, other than the four new requirements mentioned above, these areas were covered in the previous AAR.

Guidance from the ESFA

The Accounts return 2017/18 guidance can be accessed from the ESFA here.
The full guide to completing the 31 August 2018 accounts return is due to be released in September 2018 with the online form going live in October 2018.

If you would like to discuss the new requirements, or anything in relation to your financial statements or AAR, please contact one of our academy specialists or your usual Moore Stephens academy contact.

 

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