FINANCIAL STATEMENTS

FINANCIAL FRAMEWORK

The Statement of Accounts provide an overview of the council's financial position for 2025/26. The 2025/26 set of accounts conform to the Code of Practice on Local Authority Accounting in the United Kingdom 2025/26 (the Code), which is based on International Financial Reporting Standards (IFRS).

The layout and purpose of each statement is explained in the following section.

EXPLANATORY STATEMENTS

• Statement of Responsibilities - explains the responsibilities of the council and its Strategic Director, Resources in relation to the council's financial affairs and the Statement of Accounts.

CORE STATEMENTS

• Comprehensive Income and Expenditure Statement – shows the accounting cost in the year of providing services in accordance with generally accepted accounting practices, rather than the amount to be funded from taxation (or rents). Authorities raise taxation (and rents) to cover expenditure in accordance with statutory requirements; this may be different from the accounting cost. The taxation position is shown in both the expenditure and funding analysis and the movement in reserves statement.
• Movement in Reserves Statement – shows the movement from the start of the year to the end on the different reserves held by the council, analysed into ‘usable reserves’ (those that can be applied to fund expenditure or reduce local taxation) and other ‘unusable reserves’. The statement shows how the movements of reserves are broken down between gains and losses incurred in accordance with generally accepted accounting practices and the statutory adjustments required to return to the amounts chargeable to council tax (or rents) for the year. The net increase/decrease line shows the general fund balance and Housing Revenue Account (HRA) balance movements in the year following those adjustments.
• Balance Sheet - shows the value as at the balance sheet date of the assets and liabilities recognised by the council. The net assets of the council (assets less liabilities) are matched by the reserves. Reserves are reported in two categories as below.

Usable reserves, those reserves that the council may use to provide services, subject to the need to maintain a prudent level of reserves and any statutory limitations on their use (for example the capital receipts reserve may only be used to fund capital expenditure or repay debt).

Unusable reserves, those that the council is not able to use to provide services. This category of reserves includes reserves that hold accounting gains and losses (for example the revaluation reserve), where amounts would only become available to provide services if the assets are sold; and reserves that hold timing differences shown in the movement in reserves statement line 'adjustments between accounting basis and funding basis under regulation'.

• Cash Flow Statement – shows the changes in cash and cash equivalents during the reporting period. The statement shows how the council generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The net cash flows arising from operating activities is a key indicator of the extent to which the operations of the council are funded by way of taxation and grant income or from the