3 Financial reporting
3.1 Reporting in the partner financial statements
3.1.1 The reporting in the financial statements of the Local Authority and Health Board should follow the existing treatments. The payment from the delegating partner should be shown as expenditure in its accounts and will be shown as income in the lead partner accounts together with the associated expenditure.
Will the arrangement be treated as a business combination under IFRS3?
3.1.2 No; the model is a delegation of function and not a transfer of function and responsibility between two parts of the public sector.
How should the integration arrangement be reported?
3.1.3 The integration arrangement should be disclosed under related parties as required under IAS24, including disclosure of the value of the delegated resources in the Integrated Budget.
How will over/underspends against the Integrated Budget be reported?
3.1.4 In-year variances are the responsibility of the host partner and guidance on its management and associated treatment is in section 4.3.1.
Will the partners need to include a note analysing how the Integrated Budget has been spent in their financial statements?
3.1.5 Not in their financial statements, but information will be required for LFR3 and SFR returns as noted below.
3.2 Central returns
3.2.1 The Health Board (SFR) and the Local Authority (LRF3) currently submit returns to the Scottish Government relating to health and social care. Proposals will be developed by the Scottish Government to revise the returns to reflect the integration arrangements. Information on the revised arrangements for the LFR3 will be issued by Scottish Government. Guidance on the SFR will continue to be provided in Unified Board Accounts Manual.
3.3 Whole of Government Accounts (WGA)
3.3.1 The partner authorities will continue to use the existing guidance for their submissions to the WGA process, noting that there will be additional adjusting entries in respect of the payment to the host authority.
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