Financial Statements 2018/19


Where parts of a fixed asset have different useful lives, they are accounted for as separate items of fixed assets.


Land and buildings Capitalisation


Costs incurred in relation to land and buildings after initial purchase or construction are capitalised to the extent that they increase the expected future benefits to the University.


Depreciation


Freehold land is not depreciated as it is considered to have an indefinite useful life. Freehold buildings are depreciated on a straight line basis over their expected useful lives as follows


Freehold Buildings Freehold Buildings Major Improvements Minor Refurbishments


50 years 50 years


10 – 20 years


Buildings include long leasehold premises and property depreciated over the life of the lease up to a maximum of 50 years. Capitalised costs of leasehold building improvements are depreciated over the shorter of their useful life or the remaining term of the lease.


Equipment Capitalisation


Fixtures, Fittings and Equipment, including computers and software, costing less than de minimums £30,000 per individual item or group of related items 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.


5 – 10 years 4 years


5 – 10 years 3 years


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.


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 of three months or less at the date of deposit.


Cash flows comprise increases or decreases in cash.


Middlesex University 75


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