The National Audit Office (NAO) has qualified the Ministry of Defence (MoD) accounts for the fifth year running. This is despite significant improvements in the management and accounting for assets held on its inventory systems, although there were concerns over incomplete information about leases. Reviewing the 2013-14 accounts, the NAO said the MoD had not complied with the accounting requirement under International Financial Reporting Standards (IFRS) for determining whether a contract contains a lease, although it has made some progress in quantifying the impact of non-application of IAS 17, Leases. This is particularly important as the MoD enters into strategic arrangements with certain contractors to procure specialist defence platforms on a non-competitive basis under an arrangement that is exclusive, or near exclusive, for the use of industrial assets and capability, which has limited use for other customers.
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