1. Accounting policies (continued) Fund accounting All the funds of the Group are unrestricted funds with the exception of certain grants receivable that are not considered material to the Financial Statements of the Trust and the Group.
Tangible fixed assets Tangible fixed assets, excluding land, held by the Group and the Trust are stated at cost less accumulated depreciation. Land is stated at cost.
Depreciation is calculated using the straight-line method to allocate the cost of each asset less its residual value over its estimated useful life. Depreciation commences from the date an asset is brought into service. No depreciation is charged during the year on assets in the course of construction.
The useful lives for depreciation purposes for the principal categories of assets are: Buildings Finance leased plant and equipment
Other plant and equipment, furniture, fixtures and fittings Computer equipment and motor vehicles
Years 50
10 to 30 3 to 15 3 to 5
Heritage assets The Trustee does not consider that reliable cost or valuation information can be obtained for the vast majority of heritage assets held by the Trust. This is because of the diverse nature of the assets held, the number of assets held and the lack of comparable market values. The cost of valuing the entire collection would be onerous compared with the benefit derived by users of the Financial Statements in assessing the Trustee’s stewardship of the assets. The Trust does not therefore recognise these assets on the Balance Sheet, other than significant acquisitions acquired after 1 October 2005 which are reported at cost where the asset is purchased or at the curator’s best estimate of current value where the object is donated.
Leased assets Where assets are financed by leasing agreements that give rights to the lessee approximating to ownership, the assets are treated as if they had been purchased outright by the lessee. The amount capitalised is the present value of the minimum lease payments payable during the lease term. The corresponding lease commitments are shown as obligations to the lessor. Interest is charged over the duration of the lease in proportion to the balance outstanding. Depreciation on the relevant assets and interest is charged to the Statement of Financial Activities.
The annual rentals for operating leases are charged to the Statement of Financial Activities on a straight-line basis over the lease term.
Investment assets (i) Quoted investments Quoted investments comprise publicly quoted, listed securities including shares, bonds and units. Quoted investments are stated at fair value at the balance sheet date. The basis of fair value for quoted investments is equivalent to the market value, using the bid price. Asset sales and purchases are recognised at the date of trade.
(ii) Unquoted investments Unquoted investments are valued at management’s best estimate of fair value. The principal unquoted valuations are performed as follows:
Unquoted hedge funds Unquoted hedge funds are valued by reference to the fair value of their underlying securities. These valuations are provided by the third party hedge fund administrators.
Private equity funds and property funds The vast majority of private equity and property fund investments are held through funds managed by private equity and property groups. No readily identifiable market price is available for these unquoted funds. These funds are included at the most recent valuations from their respective managers. In addition, some early-stage investments will be held at cost where the managers have yet to provide a valuation.
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