overdraſts. Bank overdraſts, when applicable, are shown within current liabilities.
Debtors and creditors
Debtors and creditors with no stated interest rates are recorded at transaction price. Any losses arising from impairment are recognised in the Statement of Comprehensive Income within administrative expenses.
(k) Taxation
Taxation expense for the period comprises current and deferred tax recognised in the reporting period. Current and deferred taxation assets and liabilities are not discounted.
Current tax is the amount of income tax payable in respect of the taxable profit for the year or prior years. Tax is calculated on the basis of the tax rates and laws that have been enacted or substantively enacted by the period end.
Deferred tax arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. Deferred tax is recognised in respect of all timing differences which have originated but not reversed at the balance sheet date.
(l) Employee benefits
The Association provides a range of benefits to employees including paid holiday arrangements and defined benefit and defined contribution pension plans.
Short term benefits
Short term benefits, including holidays and other similar non- monetary benefits are recognised as an expense in the period in which the service is received.
Defined benefit pension scheme
The Association operates the RYA Retirement Benefits Scheme, a UK registered trust-based pension scheme that provides defined benefits. Trustees are responsible for running the scheme and are required to act in the best interests of the beneficiaries of the scheme. The liability recognised in the Statement of Financial Position in respect of the defined benefit pension scheme is the present value of the defined benefit obligation at the end of the reporting date less the fair value of the scheme assets at the reporting date. The defined benefit obligation is calculated using the projected unit credit method. Annually the Association engages an independent actuary to calculate the obligation.
The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating the estimated duration of the future periods (discount rate). The fair value of the scheme’s assets is measured in accordance with the FRS 102 fair value hierarchy and includes the use of appropriate valuation techniques. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts, together with the return on plan assets, less amounts included in net interest, are disclosed as Remeasurement of Net Defined Benefit Pension Liability.
2. Critical Accounting estimates and judgements
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Association’s accounting policies and the reported assets, liabilities, income and expenditure and the disclosures made in the financial statements. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Key areas subject to judgement and estimation are as follows:
(a) Investment property
The Association carries its investment property at fair value, with changes in fair value being recognised in the Statement of Comprehensive Income. The property is a mixed use property and has been separated between tangible fixed assets and investment property. The property was last professionally valued as at 31 March 2024 and the fair value of the investment property was estimated as an apportionment of this valuation.
(b) Defined benefit pension scheme
The Association has obligations to pay pension benefits under a defined benefit pension scheme. The cost of these benefits and the present value of the obligation depend on a number of factors including; life expectancy, salary increases, asset valuations and the discount rate on corporate bonds. The directors, in consultation with the scheme’s actuary, agree the key factors and estimates that determine the net pension obligation in the Statement of Financial Position on the basis of historical experience and current trends.
RYA Annual Strategic Report 2024 25
The cost of the defined benefit plan is recognised as employee costs and comprises:
• the increase in the pension benefit liability arising from employee service during the year; and
• the cost of plan introductions, benefit changes, curtailments and settlements.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of the scheme assets. The cost is recognised in administrative costs as “finance costs”.
Defined contribution pension plans
The Association operates a group personal pension scheme under which the Association makes fixed contributions to a separate entity. The Association also makes contributions to certain employees’ personal pension schemes. The contributions are recognised as an expense when they fall due. The assets of the pension plans are held separately from the Association in independently administered funds.
(m) Leasing
Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
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