Academies Accounts Direction 2026: key updates and implications

The Academies Accounts Direction 2025 to 2026, published by the Department for Education (DfE), provides essential guidance for academy trusts, their auditors and reporting accountants in preparing and auditing financial statements for the year ending 31 August 2026. The Direction ensures financial reporting remains transparent, consistent and aligned with statutory requirements.

Purpose of the Accounts Direction

The Accounts Direction outlines the framework for:

• Preparing annual financial statements
• Conducting statutory audits and regularity reviews
• Ensuring compliance with the Companies Act 2006 and the Academy Trust Handbook

It remains a contractual requirement under an academy trust’s funding agreement and must be followed alongside the Model Set of Accounts and the Framework and Guide for External Auditors.

Key changes in the 2026 edition

The 2026 edition introduces a number of targeted updates aimed at improving clarity and consistency:

1. Governance and narrative reporting

• Removal of the requirement to disclose trade union facility time
• Increased expectations for sustainability and SECR-related disclosures, reflecting updated thresholds
• Encouragement to include forward-looking commentary on future reporting developments

2. Changes to the model set of accounts

The model set of accounts has been revised to include:

• Updates to reflect revised disclosures within the Accounts Direction, particularly staff costs, governance and narrative reporting
• Amendments to trustees’ report and governance statement wording to improve clarity and consistency
• Further refinement of finance lease disclosures including expanded commitment tables

3. Auditor and reporting accountant guidance

The Framework and Guide have been updated to reflect:

• Expanded expectations for regularity and propriety, with greater emphasis on professional judgement and documentation
• Updates to auditor and reporting accountant report wording to reflect revised disclosures

4. Staff costs and remuneration

• Payments in lieu of notice (PILON) must be included within restructuring costs
• Additional narrative required where staff exceed £60,000 on a full-time equivalent basis
• Clarification that CEO or Headteacher remuneration is excluded from trustee pay disclosures where they are not trustees  

Compliance and next steps

Academy trusts should:

• Update financial statement templates to reflect revised disclosures
• Review classification of staff costs and remuneration
• Ensure sustainability and narrative reporting requirements are met
• Engage early with auditors to address changes

Looking ahead

The 2026 Direction continues the trend of incremental updates focused on transparency and consistency. Trusts should remain aware of forthcoming developments, particularly the implementation of the Charities SORP 2026 and evolving sustainability reporting expectations.

While the changes in the 2026 Direction are relatively limited, academy trusts should be aware that the 2027 edition is expected to introduce more substantial updates arising from the new FRS 102 and Charities SORP. Early preparation will be essential to ensure a smooth transition to the revised reporting framework.

If you would like to discuss this in further detail, please get in touch with one of our Academies experts here.