Middlesex University
Financial Statements 2015/16
37. Transition to FRS102 and the 2015 SORP (continued)
Explanation of the changes to previously reported surplus and net assets: a. Deferred Capital Grants 1. Represents the transfer of Deferred Capital grants from Government sources (accounted for under the performance model) to creditors within Net Assets where the performance related conditions have not been met.
2. FRS102 requires income from Non-Government grant sources to be accounted for under the Performance model. This change in rules has resulted in £896k of Non-government capital grants being credited to general reserves at the transitional date 31 July 2014 and a further £22k reversal of the annual release in the income statement at 31 July 2015.
3. An option under FRS102 is to account for income from Government grant sources under the performance or accruals model. The choice of performance model has resulted in £23,669k of Government capital grants being credited to general reserves at the transitional date 31 July 2014 and a further £960k reversal of the annual release in the income statement 31 July 2015.
b. Employer leave accrual FRS102 requires an accrual for staff holiday pay where holiday is due at the year end but has not been taken. The resulting accrual at the transitional balance sheet date 31 July 2014 is £5.4m and a further £313k reported in the income statement ending 31 July 2015 representing the movement (increase) in the opening liability.
c. Land and buildings Revaluation An option under FRS102 allows at transition date 31 July 2014 a final valuation of property to be regarded as ‘deemed cost’. The net effect in the transitional balance sheet of adopting this ‘one-off’ policy in revaluing certain Land & Building assets has resulted in a uplift in land value by £11.9m and an impairment on Buildings of £995k.
d. Actuarial (loss)/gain in respect of LGPS pension scheme The net effect in the period ending 31 July 2015 of the revised method for determining interest cost on the LGPS defined benefit pension scheme under FRS102. Although the change required has no effect on the overall deficit in the LGPS (£99.3m 2014/15) the interest cost has increased by £2.8m.
e. Donations and Endowments The recognition in the income statement of £123k of Endowment income on entitlement.
Cash flows The presentation of the Cash flow statement has also been changed in order to comply with FRS102.
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