(a) on or after 1st April 2004, it enters into a transaction (“the new transaction”) which varies a transaction entered into previously, whether before, on or after 1st April 2004 (“the earlier transaction”);

(b) the earlier transaction did not result in the local authority being taken to have entered into a credit arrangement; and

(i) the date on which the earlier transaction was entered into; or

(ii) if later, 1st April 2004,

be taken to have entered into a credit arrangement, and the date on which it is taken to have entered into the credit arrangement by virtue of this regulation is the date on which it enters into the new transaction

Operating and finance leases

9A

(1) A sum received by a local authority —

(a) under any arrangement which is treated, in accordance with proper practices, as an operating lease or a finance lease;

(b) which, apart from this Regulation would be a capital receipt; and

shall not be treated for the purposes of Chapter 1 of Part 1 as a capital receipt.

(2) In paragraph (1) “local authority” includes a community council and charter trustees.

Back payment following unequal pay

24A

(1) For the purposes of this regulation—

(a) a reference to an employee of a local authority includes a reference to a former employee, an officer or a former officer of the local authority;

(b) a reference to the contract under which an employee was or is employed includes a reference to the terms of appointment under which an officer held or holds office; and

(c) an employee of a local authority received unequal pay when the amount of pay which the employee received from the local authority for work done by the employee during a particular period is less than the appropriate amount of pay for that work done during that period.

(2) In this regulation—

“appropriate amount of pay”, in relation to an employee of the local authority, means the amount of pay to which the employee is entitled in accordance with any equality clause deemed to be included, by virtue of section 1(1) of the Equal Pay Act 1970 in the contract under which the employee was or is employed;

“back payment” means a payment of arrears of remuneration made by a local authority for work—done by an employee of the local authority;in respect of which the employee received unequal pay; anddone prior to when the employee first receives any increase in pay as a result of receiving that unequal pay,which is paid to the employee, or part of which is paid to the employee (“the net payment”) and part of which is paid to another person on behalf of the employee (“relevant deductions”) because the employee received unequal pay for that work; and

“social security costs” means any contributions by a local authority to any state social security or pension scheme, fund or arrangement.

(3) Paragraph (4) applies where a local authority—

(a) is required by an employment tribunal or a court to make a back payment;

(b) considers that it is probable that:

(i) an employment tribunal or a court will require it to make a back payment; and

(ii) is able to make a reasonable estimate of the amount of such back payment;

(d) considers that it is probable that:

(i) it will reach an agreement or otherwise determine to make a back payment; and

(ii) is able to make a reasonable estimate of the amount of such back payment.

(4) Where this paragraph applies, on or after 31 March 2014 the local authority need not charge to a revenue account an amount in respect of—

(a) the back payment (including any relevant deductions); or

(b) social security costs or other costs incurred by the local authority in relation to that back payment,

until the date on which the local authority must pay that back payment, or the net payment part of that back payment, to the employee either as required by an employment tribunal or court or, in any other case, in accordance with the agreement or determination (as the case may be) made by the local authority in relation to the employee.

(5) ... This regulation ceases to have effect on 1 April 2020.

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Proper practices

Early repayment of loans — premiums and discounts at 31st March 2007

24B

(1) Subject to paragraph (2), this regulation applies where—

(a) a local authority repays a loan of money before 1st April 2007 and before the date on which the local authority is required, in accordance with the terms of the loan, to fully repay the whole or the remaining part of it;

(b) as a consequence of such early repayment—

(i) the local authority is required to pay a premium to the lender of the loan or is required, in accordance with proper practices, to account for a amount in respect of a premium as if it were required to pay such a premium; or

(ii) the lender of the loan gives the local authority a discount on the loan or the authority is required, in accordance with proper practices, to account for an amount in respect of a discount as if the lender had given the local authority such a discount; and

(c) an amount in respect of the premium or discount, as the case may be, included, in accordance with proper practices, in the local authority’s balance sheet at the beginning of the 2007 financial year is less than the amount so included immediately before the 2007 financial year.

(2) This regulation does not apply in relation to an amount in respect of a discount where a local authority credited the total amount of the discount to a revenue account, before the date on which this regulation comes into force, in accordance with proper practices or with proper accounting practices which the local authority was required to follow at that time.

(3) Where this regulation applies, in each relevant year, the amount that a local authority must charge to a revenue account for that financial year in respect of the premium or credit to a revenue account for that financial year in respect of the discount, as the case may be—

(a) in the case of a premium, is an amount which is the same as or greater than the amount calculated in accordance with the formula specified in paragraph (4);

(b) in the case of a discount, is an amount which is the same as or less than the amount calculated in accordance with that formula.

(4) The formula specified for the purposes of paragraph (3) is—

(5) In this regulation—

“2007 financial year” means the financial year which begins on 1st April 2007;

“A” is the amount in respect of a premium or discount, as the case may be, included in the local authority’s balance sheet immediately before the 2007 financial year less the amount in respect of the premium or discount included in the local authority’s balance sheet at the beginning of the 2007 financial year;

“B” is the total of—in the case of a premium—any amounts charged to a revenue account before the current year, by virtue of this regulation, in respect of the premium; andany capital receipts used on or after 1st April 2007 to pay any part of the premium;in the case of a discount, any amounts credited to a revenue account before the current year, by virtue of this regulation, in respect of the discount;

“C” is the number of financial years from the current year to the final year inclusive;

“amount” includes a nil amount;

“current year” means the financial year for which the local authority is calculating the amount to charge or credit to its revenue account in accordance with this regulation;

“final year” means—in the case of a premium—the financial year in which the whole or the remaining part of the loan would have been due to be fully repaid in accordance with the terms of the loan if the loan had not been repaid before that financial year; orif later, the financial year in which the whole or the remaining part of any replacement loan (or, if more than one, the replacement loan which is due to be fully repaid last) is due to be fully repaid in accordance with the terms of the replacement loan;in the case of a discount—the financial year in which the whole or the remaining part of the loan would have been due to be fully repaid in accordance with the terms of the loan if the loan had not been repaid before that financial year; orif earlier, the financial year which ends on 31st March 2016;

“relevant year” means the 2007 financial year and each subsequent financial year until, and including, the final year; and

“replacement loan” means any loan of money to the local authority some or all of which the local authority treats, for accounting purposes, as a replacement for some or all of the loan referred to in sub-paragraph (a) of paragraph (1).

Early repayment of loans — premiums and discounts after 31st March 2007

24C

(1) This regulation applies where—

(a) a local authority repays a loan of money on or after 1st April 2007 but before the date on which the local authority is required, in accordance with the terms of the loan, to fully repay the whole or the remaining part of it;

(b) as a consequence of such early repayment—

(i) the local authority is required to pay a premium to the lender of the loan or is required, in accordance with proper practices, to account for an amount in respect of a premium as if it were required to pay such a premium; or

(ii) the lender of the loan gives the local authority a discount on the loan or the local authority is required, in accordance with proper practices, to account for an amount in respect of a discount as if the lender had given the local authority such a discount; and

(c) the local authority is not required, in accordance with proper practices, to include an amount in respect of the premium or the discount, as the case may be, in the local authority’s balance sheet on or after 1st April 2007.

(2) Where this regulation applies, in the initial year and in each subsequent financial year until, and including, the final year, the amount that the local authority must charge to a revenue account for that financial year in respect of the premium or credit to a revenue account for that financial year in respect of the discount, as the case may be—

(a) in the case of a premium, is an amount which is the same as or greater than the amount calculated in accordance with the formula specified in paragraph (3);

(b) in the case of a discount, is an amount which is the same as or less than the amount calculated in accordance with that formula.

(3) The formula specified for the purposes of paragraph (2) is—

(4) In this regulation—

“D” is the amount of the premium or the amount of the discount, as the case may be;

“E” is the total of—in the case of a premium—any amounts charged to a revenue account before the current year, by virtue of this regulation, in respect of the premium; andany capital receipts used to pay any part of the premium;in the case of a discount, any amounts credited to a revenue account before the current year, by virtue of this regulation, in respect of the discount;

“F” is the number of financial years from the current year to the final year inclusive;

“amount” includes a nil amount;

“current year” means the financial year for which the local authority is calculating the amount to charge or credit to its revenue account in accordance with this regulation;

“final year”—in the case of a premium, has the same meaning as in sub-paragraph (a) of the definition of “final year” in regulation 24B;in the case of a discount, means—the financial year in which the whole or the remaining part of the loan would have been due to be fully repaid in accordance with the terms of the loan if the loan had not been repaid before that financial year; orif earlier, the ninth financial year after the initial year (counting consecutively the financial years immediately following the initial year); and

“initial year” means the financial year in which the loan is repaid ;

“replacement loan” means any loan of money to the local authority some or all of which the local authority treats, for accounting purposes, as a replacement for some or all of the loan referred to in sub-paragraph (a) of paragraph (1).

Interest on loans given by local authorities

24D

(1) Paragraph (3) applies where—

(a) on or after 1st April 2007, a local authority gives a loan to a person;

(b) the local authority, in accordance with proper practices, includes an amount in respect of that loan in its balance sheet at the end of the financial year in which the loan is given (“the loan year”); and

(c) the amount referred to in sub-paragraph (b) is less than the amount of the loan outstanding at the end of the loan year.

(2) Paragraph (3) applies where—

(a) a local authority gave a loan to a person before 1st April 2007 and the whole or any remaining part of the loan is outstanding on or after 1st April 2007;

(b) the local authority, in accordance with proper practices, includes an amount in respect of that loan in its balance sheet at the end of the financial year which began on 1st April 2007 (“the 2007 financial year”); and

(c) the amount referred to in sub-paragraph (b) is less than the amount of the loan outstanding at the end of the 2007 financial year.

(3) Where this paragraph applies, the amount of the interest, if any, in respect of the loan which the local authority credits to its revenue account—

(i) where the loan was given on or after 1st April 2007, in the loan year; or

(ii) where the loan was given before 1st April 2007, in the 2007 financial year; and

(b) in each subsequent year until, and including, the financial year in which the whole or any remaining part of the loan is fully repaid,

is the amount of the interest, if any, which it is due to receive in that year in accordance with the loan agreement for that loan.

Proper practices

Interest on stepped interest rate loans taken out by local authorities

24E

(1) This regulation applies—

(a) where on any day before 21 January 2008 —

(i) a local authority had taken out a stepped interest rate loan, and

(ii) that loan had not been repaid in full; and

(b) in relation to financial years beginning on or after 1 April 2007.

(2) Where this regulation applies, the amount the local authority charges to its revenue account with respect to the interest payable on the loan must be either—

(a) the amount of the interest, if any, which it is due to pay in the financial year in accordance with the loan agreement for that loan; or

(b) calculated in accordance with the accounting practices identified in regulation 25.

(3) In this regulation, “stepped interest rate loan” means a loan taken out by a local authority at an interest rate which increases in one or more increments through the life of the loan.

Financial guarantees given by local authorities

24F

(1) This regulation applies—

(a) where before 21 January 2008 a local authority has given a financial guarantee on behalf of another person; and

(b) in relation to financial years beginning on or after 1 April 2007.

(2) Where this regulation applies, the amount the local authority charges to its revenue account with respect to the guarantee must be calculated either—

(a) in accordance with proper practices for the financial year beginning on 1 April 2006; or

(b) in accordance with the accounting practices identified in regulation 25.

Proper practices

Impairment of certain investments

24G

(1) Where, in relation to a relevant investment, in accordance with proper practices—

(a) an impairment loss is recognised in a revenue account of the local authority for the financial year beginning on 1 April 2008;

(b) an impairment loss is recognised in a revenue account of the local authority for the financial year beginning on 1 April 2009; ...

(ba) an impairment loss is recognised in a revenue account of the local authority for the financial year beginning on 1 April 2010;

(c) the value of an impairment loss recognised in a revenue account of the local authority for the financial year beginning on 1 April 2008 is increased in a revenue account of the authority for the financial year beginning on 1 April 2009 ; or

(d) the value of an impairment loss recognised in a revenue account of the local authority for the financial year beginning on 1 April 2009 is increased in a revenue account of the authority for the financial year beginning on 1 April 2010,

the local authority may credit to a revenue account for the year in which the loss is recognised, or increased in value, any amount up to the amount of the loss.

(2) A local authority which credits an amount to a revenue account for the financial year beginning on 1 April 2008 under paragraph (1) may debit an amount of up to the value of that credit to a revenue account for the financial year beginning on 1 April 2009.

(2A) A local authority which credits an amount to a revenue account for the financial year beginning on 1 April 2009 under paragraph (1) may debit an amount of up to the value of that credit to a revenue account for the financial year beginning on 1 April 2010.

(3) Where—

(a) under paragraph (1) a local authority credits an amount to a revenue account for the financial year beginning on 1 April 2008 or 1 April 2009; and

(b) in accordance with proper practices—

(i) the value of the impairment loss to which that credit relates is reduced in the financial year beginning on 1 April 2009 or 1 April 2010, and

(ii) the local authority credits an amount to a revenue account for that year to recognise that reduction,

the local authority must debit to a revenue account for the financial year beginning on 1 April 2009 or, as the case may be, 1 April 2010 an amount equal to the credit mentioned in paragraph (b)(ii).

(4) Where—

(a) under paragraph (1) a local authority credits an amount to a revenue account for the year beginning on 1 April 2008; and

(b) in accordance with proper practices credits or has credited any amount to a revenue account before 1 April 2009 in respect of interest on the relevant investment not received on or before the date of the event giving rise to the impairment loss,

the local authority must debit to a revenue account for the financial year beginning on 1 April 2008 an amount equal to the total of the amounts mentioned in sub-paragraph (b).

(5) Where—

(a) under paragraph (1) a local authority credits an amount to a revenue account for the year beginning on 1 April 2008 or 1 April 2009; and

(b) in accordance with proper practices credits or has credited any amount to a revenue account before 1 April 2010 in respect of interest on the relevant investment not received on or before the date of the event giving rise to the impairment loss,

to the extent it has not debited an amount under paragraph (4) in respect of the interest, the local authority must debit to a revenue account for the financial year beginning on 1 April 2009 an amount equal to the total of the amounts mentioned in sub-paragraph (b).

(5A) Subject to paragraph (6), where—

(a) under paragraph (1) a local authority credits an amount to a revenue account for the year beginning on 1 April 2008, 1 April 2009 or 1 April 2010; and

(b) in accordance with proper practices, the authority credits or has credited any amount to a revenue account before 1 April 2011 in respect of interest on the relevant investment not received on or before the date of the event giving rise to the impairment loss,

to the extent it has not debited an amount under paragraphs (4) or (5) in respect of the interest, the local authority must debit to a revenue account for the financial year beginning on 1 April 2010 an amount equal to the total of the amounts mentioned in sub-paragraph (b).

(6) A local authority need not under paragraphs (3) to (5A) debit to a revenue account a total amount that exceeds the total amount it has credited under paragraph (1).

(7) In paragraph (6), the reference to the total amount credited under paragraph (1) is a reference to that amount as reduced by a debit under paragraph (2) or (2A).

(8) To the extent that a credit under paragraph (1) has not been fully reversed by debits under paragraphs (2) to (5A), a local authority must debit to a revenue account for the financial year beginning on 1 April 2011 an amount equal to the value of the credit.

(9) In this regulation, a relevant investment is a local authority investment—

(a) in a bank; and

(b) affected by an event in the period commencing on 1 April 2008 and ending on 27 November 2008,

other than an investment of the type described in section 17(1)(e).

Proper practices

Short-term accumulating compensated absences

24H

Where, in accordance with proper practices, a local authority includes an amount in respect of a liability for short-term accumulating compensated absences in its balance sheet, the authority must not charge to a revenue account an amount in respect of that liability until the date on which the liability ceases or is discharged.

Lease classification

24I

Where, on or after 1 April 2009, a local authority receives money under an arrangement—

(a) which is in existence on, and is not treated according to proper practices as a finance lease at, 31 March 2010, and

(b) all or part of that arrangement will be treated according to proper practices as a finance lease on or after 1 April 2010,

the money received under that arrangement may be accounted for in accordance with proper practices applying to that arrangement on 31 March 2010.

24J

Where, on or after 1 April 2009, a local authority receives money under an arrangement—

(a) which is in existence on, and is not treated according to proper practices as an operating lease at, 31 March 2010, and

(b) all or part of that arrangement will be treated according to proper practices as an operating lease on or after 1 April 2010,

the money received under that arrangement may be accounted for in accordance with proper practices applying to that arrangement on 31 March 2010.

Proper practices

Accounting treatment of loans from the Public Works Loan Board drawn down on 2 April 2015

25A

(1) This regulation applies to loans for the purpose of funding the settlement payment to exit the HRA Subsidy system—

(a) given to local authorities by the Public Works Loan Board; and

(b) drawn down on 2 April 2015.

(2) Where the interest rates applicable to the loans specified in paragraph (1) are agreed at a rate of interest which is other than the prevailing market rate of interest set on 2 April 2015, a local authority is not required to recognise in its revenue account any difference from the prevailing market rate for the purpose of fair value.

(3) Interest payable on a loan specified in paragraph (1) must be recognised in a local authority revenue account on the day when, or as soon as practicable after, a local authority becomes liable to pay that interest.

(4) This regulation applies to the financial years beginning on and after 1 April 2015.

(5) In this regulation—

“fair value” means the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, in accordance with proper practices as defined in regulation 25;

“HRA Subsidy” means the system established under section 79 of the Local Government and Housing Act 1989.

TRANSACTIONS WHICH ARE CREDIT ARRANGEMENTS

Securitisation transactions

2A

A securitisation transaction must be treated as a transaction falling within section 7(2)(a).

Bonds

6A

(1) For the purpose of Chapter 1 of Part 1, the sums to which paragraph (2) refers must be treated as capital receipts.

(2) Sums received by a local authority in respect of the redemption on maturity of a bond or the disposal of a bond where—

(a) the acquisition of the bond was prior to 1 April 2018; and

(b) expenditure on the acquisition was treated as capital expenditure.

(3) In paragraph (2) “local authority” includes a community council and charter trustees.

Disposal of mortgage portfolio

Securitisation transaction receipts

8A

For the purposes of Chapter 1 of Part 1, any sum received as consideration by a local authority as the result of a securitisation transaction which, apart from this regulation, would not be a capital receipt, must be treated as a capital receipt.

Fair value gains and losses of pooled investment funds

24K

(1) In this regulation—

“administering authority” means an administering authority as defined in Schedule 1 to the Local Government Pension Scheme Regulations 2013;

“fair value” has the same meaning as in Regulation 25A to these Regulations;

“fair value gain or loss” means a change in the fair value of an investment;

“pooled investment fund” means—a money market fund; oran investment scheme approved by the Treasury under section 11(1) of the Trustee Investments Act 1961 (local authority investment schemes).

(2) Paragraph (3) applies where a local authority—

(a) invests in a pooled investment fund (other than in its capacity as an administering authority in relation to a pension fund); and

(b) a fair value gain or loss experienced on the authority’s investment in that pooled investment fund would otherwise be charged to a revenue account by that local authority in accordance with proper practices.

(3) Where this paragraph applies, the local authority—

(a) must not charge to a revenue account an amount in respect of that fair value gain or loss; and

(b) must charge that amount to an account established, charged and used solely for the purpose of recognising fair value gains and losses in accordance with this regulation.

(4) Paragraph (3) does not apply in respect of—

(a) an impairment loss in relation to the authority’s investment in a pooled investment fund as recognised in a revenue account of the authority in accordance with proper practices; or

(b) a sale or other disposal of the whole or any part of the authority’s investment in a pooled investment fund.

(5) This regulation applies in relation to accounts prepared for financial years falling within the period beginning with 1 April 2019 and ending with 31 March 2025.

Proper practices

Accounting treatment of loans from the Public Works Loan Board drawn down on 2 April 2015

Infrastructure assets

24L

(1) In this regulation—

“carrying amount” means the amount at which an asset is recognised after deducting any accumulated depreciation and impairment losses;

“derecognised” means that all or part of an asset or liability is removed from an authority’s balance sheet;

“infrastructure asset” means an asset owned by a local authority, which there is no prospect of the authority selling or using for any purpose other than that for which it was created, and which forms part of the infrastructure of the authority’s area, such as—a highway,a footpath,a bridge,a permanent way,a coastal defence, ora water supply and drainage system;

“prior period adjustment” means a correction of a material accounting error within a local authority’s statement of accounts for a previous financial year.

(2) Paragraph (3) applies in relation to the accounts of a local authority—

(a) where the local authority is required to prepare a statement of accounts in accordance with regulation 8 of the Accounts and Audit (Wales) Regulations 2014, and

(b) the local authority has replaced a component of an infrastructure asset.

(3) Where this paragraph applies the local authority, for the purposes of determining the carrying amount to be derecognised in respect of the component that has been replaced (“the relevant amount”), must—

(a) determine the relevant amount as nil, or

(b) calculate the relevant amount in accordance with the accounting practices identified in regulation 25.

(4) If a local authority determines the relevant amount in accordance with paragraph (3)(a) it must include a note to that effect in its statement of accounts for the year in relation to which that determination is made.

(5) When preparing a statement of accounts to which this regulation applies, a local authority is not required to make any prior period adjustment to the balances of that statement of accounts in respect of infrastructure assets.

(6) This regulation applies in relation to accounts prepared for financial years falling within the periods beginning with 1 April 2021 and ending with 31 March 2025.

Proper practices

Accounting treatment of loans from the Public Works Loan Board drawn down on 2 April 2015

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The Local Authorities (Capital Finance and Accounting) (Wales) Regulations 2003

Varied Transactions

5A

Operating and finance leases

9A

Back payment following unequal pay

24A

Proper practices

Early repayment of loans — premiums and discounts at 31st March 2007

24B

Early repayment of loans — premiums and discounts after 31st March 2007

24C

Interest on loans given by local authorities

24D

Proper practices

Interest on stepped interest rate loans taken out by local authorities

24E

Financial guarantees given by local authorities

24F

Proper practices

Impairment of certain investments

24G

Proper practices

Short-term accumulating compensated absences

24H

Lease classification

24I

24J

Proper practices

Accounting treatment of loans from the Public Works Loan Board drawn down on 2 April 2015

25A

TRANSACTIONS WHICH ARE CREDIT ARRANGEMENTS

Securitisation transactions

2A

Bonds

6A

Disposal of mortgage portfolio

Payment made to redeem landlord’s share

Securitisation transaction receipts

8A

Fair value gains and losses of pooled investment funds

24K

Proper practices

Accounting treatment of loans from the Public Works Loan Board drawn down on 2 April 2015

Infrastructure assets

24L

Proper practices

Accounting treatment of loans from the Public Works Loan Board drawn down on 2 April 2015