Middlesex University


Financial Statements 2015/16


Equipment Capitalisation


Fixtures, Fittings and Equipment, including computers and software, costing less than de minimums £30,000 per individual item is recognised as expenditure through write off in the year of acquisition. All other equipment is capitalised.


Depreciation


Capitalised equipment is stated at cost and depreciated on a straight line basis over its expected useful life as follows:


Fixtures, fittings and equipment


Computer Equipment (Hardware and Software)


Motor Vehicles: Van and minibus fleet Motor Cars fleet


Assets under construction


Assets in the course of construction are accounted for at cost, based on the value of architects’ certificates and other direct costs incurred to the end of the year. They are not depreciated until they are brought into use.


Borrowing costs


Borrowing costs which are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised.


Impairment


A review for impairment of fixed assets is carried out if events or changes in circumstances indicate that the carrying amount may not be recoverable, whether through the economic benefits of use or through disposal. Where there is evidence of impairment, fixed assets are written down to the recoverable amount.


Repairs and maintenance


Expenditure to ensure that a tangible fixed asset maintains its previously recognised standard of performance is recognised in the Consolidated Statement of Comprehensive Income and Expenditure in the period it is incurred. The University has a planned maintenance programme, which is reviewed on an annual basis.


Fixed assets identified for disposal Fixed assets identified for disposal are stated at the lower of cost or net realisable value.


l. Investments


Non-current asset investments, including investments in subsidiaries, jointly controlled entities and associates are held on the Balance Sheet at original cost of the investment less a provision for impairment in value where appropriate in the University’s accounts.


Current asset investments are held at fair value with movements recognised in the Surplus or Deficit.


5 – 10 years 4 years


5 – 10 years 3 years


m. Stock


Stocks of finished goods and work-in-progress are held at the lower of cost and estimated net realisable value, and are measured using an average cost formula.


Where appropriate, a provision is made for obsolete, slow moving or defective items .


n. Cash and cash equivalents


Cash includes cash in hand, deposits repayable on demand and overdrafts. Deposits are repayable on demand if they are in practice available within 24 hours without penalty.


Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash with insignificant risk of change in value. These include investments held as part of the University’s treasury management activity with a maturity date at the year end of 3 months or less.


Cash flows comprise increases or decreases in cash.


o. Provisions, contingent liabilities and contingent assets


Provisions are recognised in the financial statements when:


a) the University has a present obligation (legal or constructive) as a result of a past event;


b) it is probable that an outflow of economic benefits will be required to settle the obligation; and


c) a reliable estimate can be made of the amount of the obligation.


The amount recognised as a provision is determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability.


A contingent liability arises from a past event that gives the University a possible obligation whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the University. Contingent liabilities also arise in circumstances where a provision would otherwise be made but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably. A contingent asset arises where an event has taken place that gives the University a possible asset whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the University.


Contingent assets and liabilities are not recognised in the Balance Sheet but are disclosed in the notes.


p. Accounting for Joint Operations, Jointly Controlled Assets and Jointly Controlled Operations


The University accounts for its share of joint ventures using the equity method.


The University accounts for its share of transactions from joint operations and jointly controlled assets in the Consolidated Statement of Comprehensive Income and Expenditure.


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