§ Mr. Iain Millsasked the Secretary of State for the Environment whether he gives any guidance to local authorities on methods to be used in assessing the value of stocks held when producing annual accounts.
§ Mr. KingMy right hon. Friend has given no general guidance on this issue. However, the Direct Labour Organisations (Rate of Return on Capital) Directions 1981 prescribe that DLO stock shall be valued at replacement cost at the time it is used.
More widely, the Chartered Institute of Public Finance and Accountancy—CIPFA—is preparing a guidance note on the application in local government of the Standard Statement of Accounting Practice No. 9, which gives advice on the methods used in allocating costs to stocks. CIPFA already issues advice to local authorities, and other public bodies, on stock management, control—including stock taking—and accounting.
Physical stocktaking in local government is usually undertaken on a regular basis throughout the year. The external auditor has a duty to ensure that local authorities employ proper stock control procedures.