Financial Statements 2019/2020


MIDDLESEX UNIVERSITY NOTES TO THE ACCOUNTS (continued)


Year Ended 31 July 2020 15. SERVICE CONCESSION ARRANGEMENTS


The University has one service concession arrangement. Hendon Campus – Student Accommodation


In April 2006 the University entered into a project agreement with a third-party property operator Middlesex First Limited for the refurbishment, financing, maintenance, managing and servicing of student accommodation on the Hendon Campus.


The student accommodation consists of three halls of residence (Usher, Platt and Writtle) where Middlesex First Limited will manage them for 35 years until 2039/40, at which point the facilities will revert back to University ownership for nil consideration.


Under the project agreement, the University does not incur a minimum guaranteed payment and instead nominates a number of rooms on an annual basis thereby incurring the demand risk on those rooms only.


Therefore the University has no infrastructure asset or liability to recognise on the statement of financial position for its obligations under the service concession arrangement as defined by FRS 102.


This arrangement has been accounted for as follows:


— The net book value of the three halls land and property assets are recognised on the statement of financial position, as no disposal of assets is deemed to have taken place. At 31 July 2020 these assets had a net book value of £9,060k included in note 14.


— The premium that was received by the University under the agreement was treated as payment for the right to access the property over the period of the agreement and is included as deferred income and is being amortised over the life of the arrangement with an amount of £374k being recognised as income each year.


— The costs and fees associated with the project agreement incurred by the University were treated as a prepayment and is being amortised over the life of the arrangement with an amount of £62k being recognised as expenditure each year.


— The annual rental income received by the University from students in the three halls and the amounts paid by the University to Middlesex First Limited as a unitary charge are both accounted for in the statement of comprehensive income and expenditure.


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Middlesex University


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