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 minimis £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
5 - 10 years 4 years 5 - 10 years
Equipment assets held under finance leases are depreciated over the life of the lease if this is a shorter period.
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 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
Non-current asset investments, including investments in subsidiaries and jointly controlled entities are held on the statement of financial position at original cost of the investment less a provision for impairment in value where appropriate in the University’s accounts. Impairment is assessed by comparing the carrying value of the investment against either an earnings or asset-based valuation of each entity as applicable to the business concerned.
Current asset investments
Current asset investments comprising of funds held on deposit in money market funds are recognised at cost less impairment. Current asset investments comprising listed equity investments or investment funds are stated at fair value with movements recognised in the surplus or deficit. Interest is accrued on a daily basis.
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 and cash equivalents.
109
Financial Statements 2020/21
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