MIDDLESEX UNIVERSITY NOTES TO THE ACCOUNTS
Year ended 31 July 2021
1. STATEMENT OF ACCOUNTING POLICIES
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Financial Statements.
A Basis of preparation
These Financial Statements have been prepared in accordance with the Statement of Recommended Practice (SORP): Accounting for Further and Higher Education 2019 edition and in accordance with Financial Reporting Standard 102 (FRS 102). They have also been prepared in accordance with the Accounts Direction issued by the Office for Students (OfS).
The University is a public benefit entity and therefore has applied the relevant public benefit requirement of FRS 102. The Financial Statements are prepared in accordance with the historical cost convention (modified by the revaluation of land and buildings fixed assets).
B Going Concern
The Financial Statements have been prepared on the basis that the University is a going concern. As part of the going concern assumption, the Board has considered the University’s financial position over a period of twelve months from the date when the Financial Statements are authorised for issue. This period includes the current (2021/22) and 2022/23 academic years.
The University’s budget for 2021/22 was approved by the Board on 28 June 2021 and included a financial forecast for future years. The Board have reviewed updated forecasts taking into account student enrolments in October and January and other pertinent data. In making the going concern assessment, the Board has considered the updated forecasts and the impact of these on the cash flow forecasts and cash balances.
The Board also assessed the principal financial risks discussed at pages 80 to 81 of the Financial Review. Part of that assessment consisted of modelling a number of possible scenarios to reflect those risks, such as the removal of the London Weighting element of the OfS teaching grant, the expectation that accommodation and other demand led income would return to near normal having been heavily impacted by the COVID-19 pandemic and the strategy to broaden the mix of income sources.
There are still areas of uncertainty related to; inflationary escalation in staff and other costs, potential for government policy changes impacting tuition fees
and funding, and further disturbance due to COVID-19 on the University’s financial position.
The forecast for 2021/22 indicates a scenario where the University may breach current loan covenants. The University has entered constructive dialogue with its lenders to restate any covenants in order to avoid any such breach. In the current forecasts, cash balances exceed the value of the outstanding loans.
After reviewing the latest available information at its meeting on 17 January 2022 and having considered the various scenarios, based on the information known to the date of approval of this report and noting the available cash balances, the Board of Governors recognise that whilst there is uncertainty, these matters do not constitute a material uncertainty and consider that the University has adequate resources to continue in operational existence for the foreseeable future. For this reason the University continues to adopt the going concern basis in preparing the Financial Statements.
C Basis of Consolidation
The consolidated Financial Statements include the University and all of its subsidiaries for the financial year to 31 July 2021. Details of the subsidiary undertakings included are given at note 30. The subsidiaries are consolidated on a line by line basis with intra-group transactions and balances eliminated on consolidation.
The results of subsidiaries acquired or disposed of during the period are included in the consolidated statement of comprehensive income from the date of acquisition or up to the date of disposal.
A 49% non-controlling interest exists in Middlesex International (Mauritius) Limited a subsidiary undertaking. The value of this minority interest has therefore been disclosed in the Financial Statements.
The consolidated Financial Statements do not include the income and expenditure of the Middlesex University Students’ Union (MDXSU) as the University has no financial interest, does not exert control or dominant influence over policy decisions. The grant expenditure included at note 10 represents the University contribution to MDXSU activities.
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Financial Statements 2020/21
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