What is new in the Academy Accounts Direction 2019-2020?

The Academy Accounts Direction 2019-2020 (‘AAD’) which applies to financial statements for accounting periods ended 31 August 2020 has recently been released and it includes various updates from last year’s version.  The main impact is to introduce a number of additional aspects of statutory disclosure in the Trustees Report – although these do not apply to smaller trusts. (The ESFA is also publishing a supplementary bulletin to the AAD which covers reporting of Covid-19 activities in the annual financial statements and these notes will be updated in due course to reflect that.)

Trustees’ report – additional statutory disclosures

  • Engagement with employees (if the academy trust has more than 250 employees)
  • Engagement with suppliers, customers and others in a business relationship with the trust such as beneficiaries, funders and the wider community (if the academy trust is ‘large’ as defined by the Companies Act 2006 – see note below for size criteria)
  • Section 172 Statement (if the academy trust is ‘large’)
    This is a statement describing how the trustees have promoted the success of the company under section 172(1) of the Companies Act 2006. On page 92 of AAD 2019-2020, there is a link to a guide published by the Charity Commission which explains that charitable companies should take “promoting the success of the company” to mean promoting the success of the charity to achieve its charitable purposes. It recognises there may be overlaps between sections of the trustees’ report and encourages charities to avoid repetition, maintain the cohesion of the narrative contained within the trustees’ report and incorporate information by cross-reference where appropriate. This Statement is also required by statute to be published on the Trust’s website.
  • Streamlined energy and carbon reporting (if the academy trust is ‘large’ and consumes more than 40,000 KWh of energy (in the UK) in a reporting period)
    In assessing whether the 40,000 kWh threshold is met, academy trusts must consider, as a minimum, all the energy from gas, electricity and transport fuel usage in the UK that they are responsible for. Trusts with subsidiaries must consider these figures on an aggregate basis. Where applicable, various details must be disclosed. For details, see paragraph 3.1.25 of the AAD and an illustrative example in Coketown trustees report (page (96).
    The ESFA has produced a good practice guide, which is accessible here. It also encourages applicable trusts to make disclosure of the environmental reporting requirements on their trust websites in a readily accessible format.

A company qualifies as large if two or more of the following apply in two consecutive financial years:

  • Gross annual income over £36m
  • Gross (total) assets over £18m
  • More than 250 employees


Where trustees have reviewed and taken account of the guidance in the Governance Handbook and competency framework for governance, the AAD encourages them to explicitly state this in the governance statement under “scope of responsibility”

The AAD also requires academy trusts to disclose how their internal audit/scrutiny function arrangements have been affected (if at all) by the new FRC Ethical Standard for Auditors. (This revised standard states that the external auditor cannot also provide internal audit/scrutiny services to the Trust from 1st September 2020.)


Where instances of irregularity, impropriety or non-compliance are noted in the accounting officer’s statement on regularity, propriety and compliance, and in the reporting accountant’s report on regularity, the relevant monetary amounts should be stated, if known.

Accounts disclosure

  • Legal costs incurred by academy trusts should be clearly identified and disclosed in the notes to the financial statements. The Coketown example accounts show a split between “Legal costs – conversion” and “Legal costs – other”.
  • An analysis of changes in net debt is now required to comply with the updated Charities SORP
  • Where multi-academy trusts have academies with £nil fund balances at year end for both 2020 and 2019, some narrative should be included to explain why no balances are shown in the funds analysis note.
  • Two or more subsidiaries may only be excluded from consolidation in the trust’s financial statements if they are not material when taken together.


As mentioned in the introduction, the changes mainly impact on the trustees report. We recommend that during the audit planning process, you check which of the additional disclosures will apply to your trust. This is particularly important in respect of Streamlined Energy and Carbon Reporting because it requires collection of relevant data in relation to the year.

If you would like a discussion about any of the points mentioned above, please contact one of your usual contacts in the BHP Academies team.