The updated Academies Accounts Direction (AAD) for 2025–2026 issued by the Department for Education (DfE) introduces a number of changes that academy trusts should be aware of when preparing their financial statements. Whilst some updates are relatively minor, others signal a more significant shift in future reporting requirements.
Below, we highlight two of the most important developments and what they mean in practice.
Removal of Trade Union Facility Time Reporting
One of the more immediate changes is the removal of the requirement to report trade union facility time within academy trusts’ financial statements.
Previously, trusts were required to disclose time spent by employees on trade union duties within the Trustees’ Report. This involved gathering data, which may of been time-consuming. However, the trade union information was not relevant to all trusts.
From 2025–2026 onwards, this disclosure is no longer required in the financial statements.
For many academy trusts, this will reduce the administrative burden during year-end reporting. However, it is still important to ensure that internal records remain robust where relevant, particularly for governance or HR purposes.
Preparing for Charities SORP 2026
While the current year’s accounts will not yet be affected, the introduction of a new annex within the AAD highlights a much more substantial change on the horizon.
Annex B has been added to support preparation for the upcoming Charities SORP 2026, which will come into effect for accounting periods beginning on or after 1 January 2026. For academy trusts, this means the changes will first apply to financial statements for the year ending 31 August 2027.
One of the most significant aspects of this update is the treatment of operating leases.
Under the new requirements, most operating leases will need to be recognised on the Balance Sheet. This represents a shift away from the current approach, where lease costs are typically expensed through the Statement of Financial Activities.
In practical terms, this will:
Increase the visibility of lease commitments within financial statements
Potentially impact key financial metrics and ratios
Require trusts to gather more detailed information about lease arrangements
Introduce new judgements around lease classification and measurement
Although this change does not affect the 31 August 2026 accounts, it is not something to leave until the final year. Early preparation will be key to avoiding disruption and ensuring a smooth transition.
What Should Academy Trusts Do Now?
Even though some changes are not yet mandatory, there is clear value in taking a proactive approach.
Trusts should consider:
Reviewing current lease arrangements and identifying those likely to fall within the new requirements
Assessing whether existing systems capture the data needed for future reporting
Discussing the upcoming changes with advisers to understand the potential impact on financial statements and key metrics
Carrie Jensen, Partner and academy specialist at Forrester Boyd said, “While the removal of trade union facility time reporting will simplify disclosures for many trusts this year, the bigger story is what lies ahead. The introduction of the Charities SORP 2026 will fundamentally change how leases are reflected in academy financial statements. Trusts that start preparing early will be in a much stronger position to manage the transition and avoid last-minute challenges.”
The 2025–2026 Academies Accounts Direction brings a mix of simplification and forward planning. While some requirements have been removed, the direction of travel is clearly towards greater transparency and more detailed financial reporting.
Understanding these changes now will help trustees and finance teams stay ahead and ensure continued compliance in the years to come.
See the full report here.
All data and figures referred to in our news section are correct at the date of publishing and should not be relied upon as still current.
