Academies accounts direction published – here’s what has changed

The Department for Education (DfE) has published its Academies Accounts Direction for 2025-2026, setting out the requirements and guidance for academy trusts preparing their annual report and financial statements for the period ending 31 August 2026.

While the structure of the Direction remains familiar, this year’s update introduces a number of targeted changes that will affect both disclosures and underlying reporting processes. Some simplify existing requirements, while others place greater emphasis on transparency, governance and consistency.

The Direction, as in previous years, is split into three parts: 

• Part 1 – sets out the financial reporting requirements for academy trusts  
• Part 2 – explains in more detail the elements making up academy trust accounts 
• Part 3 – provides more detailed and technical guidance on specific matters affecting the accounts

What has changed

As with previous years, the Direction makes several changes. The main changes this year include:  

• There is no longer a duty to report trade union facility time in academy trusts’ financial statements (paragraph 2.8). 
• Updates have been made to streamlined energy and carbon reporting (paragraph 2.23). 
• The definitions of regularity (paragraph 2.51) and propriety (paragraph 2.53) have been updated to reflect those in the latest edition of Managing Public Money (June 2025) 
• Clarifications that payments in lieu of notice must be included as part of restructuring costs (paragraph 2.148). 
• Additional guidance on the disclosure of benefits for higher paid staff covering part-time members of staff and those who worked for part of the year (paragraph 2.153) 
• The definition of key management personnel and the disclosure of their employee benefits have been updated (paragraphs 2.157 to 2.159). 
• Clarification that disclosure requirements for related party transactions apply where the principal/chief executive is a trustee (paragraph 2.179). 
• Minor editorial changes in relation to site improvements at church academy trusts (paragraph 3.10). 
• A new annex has been added to the Academies Accounts Direction, covering preparation for the introduction of the new Charities SORP 2026 (Annex B). The Academies Accounts Direction for 2026-27 will comply with the new Charities SORP 2026 and provide further guidance.

What these changes mean in practice

While many of the updates are incremental, several will have practical implications for finance teams and trustees as they prepare for the 2025–2026 reporting cycle.

The removal of the requirement to disclose trade union facility time simplifies reporting slightly and can be seen as reflects a broader trend toward streamlining disclosures that are seen as offering limited value to users of the accounts.

In contrast, the updates to streamlined energy and carbon reporting move in the opposite direction, reinforcing the growing expectation that academy trusts must demonstrate transparency around environmental impact. Trusts should ensure that data collection processes are robust and consistent across the estate, particularly where responsibility sits across multiple sites.

The revised definitions of regularity and propriety, aligned with the latest version of Managing Public Money, are more than just technical wording changes. They reinforce expectations around the stewardship of public funds and may influence how your auditors assess compliance. Trustees and Accounting Officers should be comfortable that decisions can be clearly evidenced as meeting these updated standards.

Changes to staff-related disclosures are also notable. The clarification that payments in lieu of notice fall within restructuring costs may affect how trusts present and explain organisational changes, particularly where there have been leadership changes.

Meanwhile, expanded guidance on higher paid staff disclosures — including part-year and part-time employees — will require careful review of payroll data to ensure completeness and consistency.

The updated definition of Key Management Personnel, alongside additional clarity on related party disclosures where the principal or Chief Executive Officer is also a Trustee, increases the focus on transparency and governance. Trusts should revisit how they identify Key Management Personnel and ensure that disclosures fully capture the substance of decision-making responsibilities.

Finally, the introduction of Annex B signals what is coming next. While the SORP 2026 is not yet in force for Trusts, Trusts would be well advised to start considering the potential impact now. Early engagement will help avoid a more significant adjustment when the new requirements take effect from 1 September 2026.

On Wednesday 11 March we hosted our Charity SORP 2026 accounting update webinar and it was great to see so many people join us.  The webinar, chaired by Lucy Hammond, also featured Coral Curtis and Kimberley Foulkes from our expert Charity and not for profit team.

Our webinar also included a Q&A section, allowing our attendees to ask their questions directly to our experts. You can watch the webinar here and download the slides here.

A full copy of the new AAD and accompanying documents can be obtained here.

If you’d like to understand how these changes could affect your trust’s reporting or need support preparing for the 2025–2026 cycle, get in touch with our team.