Local government finance circular 8/2024 - accounting for infrastructure assets: temporary statutory override

Part 2: Accounting for infrastructure assets

Issued by Scottish Ministers under section 12(2)(b) of the Local Government in Scotland Act 2003.

Definitions

Local Authority means a council constituted under section 2 of the Local Government etc. Act 1994 (c.39), regional transport partnerships and other bodies as set out in section 106 of the Local Government (Scotland) Act 1973.

General Fund means the fund as detailed in section 93(1) of the Local Government (Scotland) Act 1973. 

Proper accounting practices are those practices as set out by section 12 of the Local Government in Scotland Act 2003

Infrastructure assets: The CIPFA/LASAAC Code of Practice for Local Authority Accounting describes infrastructure assets as “inalienable assets, expenditure on which is only recoverable by continued use of the asset created, ie there is no prospect of sale or alternative use; examples include highways, structural maintenance of highways, footpaths, bridges, permanent ways, coastal defences, water supply and drainage systems.

A financial year is one that commences on 1 April and ends on 31 March.

Application

1. This statutory guidance applies to all infrastructure assets of a local authority.

2. The statutory overrides set out below are time limited for the periods from 1 April 2010 to 31 March 2025.

3. A local authority may choose whether or not to apply either or both of the following statutory overrides. If a local authority chooses not to apply a statutory override, then the normal provisions of the Code will apply in place of the statutory override.

Statutory override – infrastructure assets

4. Statutory Override 1:  For accounting periods commencing from 1 April 2021 until 31 March 2025 a local authority is not required to report the gross cost and accumulated depreciation for infrastructure assets.

5. Statutory Override 2:  For accounting periods commencing from 1 April 2010 until 31 March 2025 the carrying amount to be derecognised in respect of a replaced part of an infrastructure asset is to be taken to be and accounted for as a nil amount.  No subsequent adjustment shall be made to the carrying amount of the asset with respect to that part.

Disclosures

6. Where a local authority chooses to adopt either or both of the statutory overrides, this should be disclosed within the relevant note to the Annual Accounts.

Scottish Government 
Victoria Quay, Leith, Edinburgh EH6 6QQ