Middlesex University


Financial Statements 2015/16


Financial Review for the year ended 31 July 2016


Changes in Accounting Standards


This is the first year that the University has prepared financial statements in accordance with FRS102, the Financial Reporting Standard applicable in the UK. This follows the latest Higher Education Statement of Recommended Practice (SORP) issued in March 2014 that reflects the changes to UK Generally Accepted Accounting Practice (GAAP) that became effective for financial years beginning on or after 1 January 2015.


The new UK standards are intended to present a clearer view of the financial performance of the University to its board and stakeholders. The changes are in both presentation and in the assumptions and judgements which underpin the financial information provided.


The most significant change relates to pensions. FRS102 requires a single charge, calculated using the liability discount rate on the net pension liability, which is charged under ‘Interest and other finance costs’ at note 11.


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Under the previous accounting standards a separate return on assets using the expected return discount rate and interest cost on liabilities was calculated, which were presented within ‘other finance income’ and interest payable’, respectively.


While this change has no impact on the overall pension liability it has affected the allocation of interest expense between that shown as a charge to the consolidated statement of comprehensive income and expenditure and a movement in balance sheet reserves as actuarial gains and losses so increasing the charge for the financial year to £3.7m.


Additionally under FRS102, an accrual for staff holiday pay is required where holiday is due at the year-end but not taken. The movement in the holiday pay accrual for the year ended 31 July 2016 is £0.5m.


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