The Academy Accounts Direction (AAD) 2021/2022 sets out the requirements and provides guidance for Academy Trusts preparing their annual report and financial statements for the period ending 31 August 2022.
The main changes in the Academies Accounts Direction 2022 from the previous years annual publication is as follows:
- Feedback on non compliance with the Academies Accounts Direction has been updated to state that: Trusts should only follow the text in the AAD if it firmly reflects the circumstances and performance of the Trust. Trusts must not omit sections of the AAD that are required.
- Clarified that a trust must describe within their Trustees report the organisational structure of any subsidiaries.
- Included a new section within the Governance Statement which requires Trusts to describe the processes they have in place to manage conflicts of interests.
- Introduced a new disclosure requirement published by HM Treasury on severance payments for the number of severance payments to be analysed in bandings of up to £25,000 and £25,000 or more.
- Updated the guidance on PFI service concession arrangements to provide a more detailed narrative to support the numerical disclosures within the financial statements.
- Included new guidance on accounting for buildings whose construction was overseen by Department for Education (DfE) or a local authority and transferred to the academy trust on completion.
- Included a new section to provide guidance on the accounting treatment for business rates.
- Removed the previous requirement to submit dormant accounts to the ESFA.
- Removed the requirement to produce trading accounts for teaching school (hubs) as separate notes to the financial statements and also clarified where and how transactions relating to such activities should be shown in the rest of the financial statements. Guidance has also been included to cover other types of hub which academy trusts may operate.
The next steps
If you require any clarification or help with implementing the latest changes to your Academy Trust financial statements please contact your usual UHY Adviser or UHY school specialist.
