"Wealth Tax Registration for Valuers"
Please do not amend this spreadsheet as this may cause it to not work correctly. Specifically, do not: - change any sheet name; - alter the order of the sheet tabs; - hide any sheet using the Format|sheet command; - alter any of the in-built formulae; - add or delete any rows or columns. DISCLOSURE GUIDE 2010-11 for CHARITABLE NON-DEPARTMENTAL PUBLIC BODIES The Government Financial Reporting Manual (the FReM) prepared by the Treasury requires that Non-Departmental Public Bodies that have charitable status ("charitable NDPBs") comply with regulations issued under charities legislation and, where applicable, the Statement of Recommended Practice (SORP) Accounting and Reporting by Charities issued by the Charity Commission (FReM 2010/11- 1.4.1). The FReM additionally requires Charitable NDPBs to follow the principles set out in the FReM, including providing additional disclosures (for example, on notional costs and salary and pension entitlements) where these go beyond the Companies Act 2006 or the SORP, (FReM 2010/11- 1.4.1). Due to the introduction of IFRS in 2009/10, there are certain adaptations and interpretations in the 2008/09 FReM which are no longer present in the 2010/11 FReM. Where these adaptations and interpretations remain relevant to Charitable NDPBs, they have been retained in the 2010/11 disclosure guide as best practice This disclosure guide is designed to ensure that the annual report and accounts of charitable NDPBs has been prepared in the appropriate form and complies with all relevant disclosure requirements. Only those disclosure requirements considered relevant for non-limited company charitable NDPBs are covered in this guide. The guide is cross-referenced to the Charities SORP 2005, the Companies Act, SSAPs/FRSs, the Treasury's FReM, and other relevant documents. It has been prepared for use for year ending 31 March 2011. The core guide is derived from the NAO FReM disclosure guide, but sections that are not applicable or are extremely unlikely to be applicable to charitable NDPBs have been deleted in order to facilitate completion. The Initial Questions section sets out the assumptions made and the areas not covered by this disclosure guide. These questions are also designed to identify the relevant sections to be completed for each individual set of accounts. The answer to these questions will generally be “Yes” or “N/A”. The answer “No” indicates a problem which needs to be resolved. Given the variety of circumstances and the volume of requirements, this disclosure guide cannot be and is not intended to be exhaustive. Full use should be made of the cross-references to source material to ascertain the full nature of the requirements and any exceptions. Reference should also be made to the charitable NDPB‟s accounts direction and, where applicable, specific legislation relating to the charitable NDPB for any special requirements regarding the presentation of accounts. Each section of the guide is on a separate sheet of the spreadsheet. The Index sheet provides links to each sheet, and also allows certain sheets (sections) to be hidden if they do not apply. Additionally, most sheets have blue cells in column C that will hide a set of questions within that sheet if they are not applicable (type the number "0" in the cell). Within each sheet, answers are required in column D where a yellow cell is present. The cell has a drop down list containing four responses; Yes, No, N/A, or blank. A "No" response is an adverse response, and a comment - or hyperlink to a relevant document - must be provided in the "comments/link" column. The Index sheet has a FILTER button (with a toggle "on/off" action) that filters the responses on all the other sheets (save for the Initial Questions sheet) to show only the "No" answers. If other types of filtering are required (e.g. for "N/A" answers) this can be obtained by applying the Data|AutoFilter command on each sheet in the normal manner. Accounting standards need not be applied to immaterial items and disclosure requirements should be interpreted accordingly. Where immaterial items have not been disclosed, "N/A" is the appropriate response. While the guide is designed primarily for the NAO‟s internal use, it is also available to our clients and third parties via our website. The NAO can accept no liability to any client or third party arising as a result of a client‟s or third party‟s use of this guide. Hyperlinks to guidance held on the NAO intranet (Merlin) will not work on non-NAO computers. The spreadsheet has been designed for on-screen use (1024x768 resolution). While it can be printed out, users will find that they will have to configure their print settings beforehand. Although every effort has been made to make the guide comprehensive, we would welcome any suggestions for inclusion or clarification (addressed to NAO Financial Audit Practice & Quality) - tel: 020 7798 7282 or email Z3-FAPQ ABBREVIATIONS and LINKS (Note: some links are external to Merlin and so will only work if you are networked) The following abbreviations are used in the "Ref" column of this spreadsheet AC Audit Circular Ann Annex CA 1985 Companies Act 1985 CA 2006 Companies Act 2006 ChA Charities Act 2006 DAO Dear Accounting Officer letters issued by the Treasury DY "Department yellow" illustrative resource account proforma FAB Financial Audit Bulletin FReM Government Financial Reporting Manual FRS Financial Reporting Standard GAAP Generally Accepted Accounting Principles (or practice) IS SORP Information Sheet MPM Managing Public Money NDPB Non-Departmental Public Body NLF National Loans Fund Reg The Charities (Accounts and Reports) Regulations 2008 RS Reporting Statement: Operating and Financial Review § Section (of CA) Sch Schedule (to CA) SI Statutory Instrument SOFA Statement of Financial Activities SORP Statement of Recommended Practice: Accounting and Reporting by Charities (Revised 2005) SSAP Statement of Standard Accounting Practice TTTN Treasury Taskforce Technical Note UITF Urgent Issues Task Force abstract INDEX FILTER Tick if section is OFF NOT If not applicable provide brief DISCLOSURE GUIDE for charitable NDPBs for year ended explanation March 2011 Applicable mandatory INITIAL QUESTIONS mandatory SECTION A: GENERAL, ACCOUNTS STRUCTURE AND ACCOUNTING POLICIES mandatory SECTION B: TRUSTEES' ANNUAL REPORT etc. mandatory SECTION C: STATEMENT OF FINANCIAL ACTIVITIES (SOFA) AND RELATED NOTES SECTION D: NOT USED mandatory SECTION E: BALANCE SHEET AND RELATED NOTES mandatory SECTION F: CASH FLOW STATEMENT mandatory SECTION G: OTHER NOTES SECTION H: NOT USED SECTION I: NOT USED J SECTION J: CONSOLIDATED ACCOUNTS SECTION K: NOT USED L SECTION L: GROUP ACCOUNTS NOT REQUIRED SECTION M: NOT USED SECTION N: NOT USED SECTION O: NOT USED SECTION P: LOANS, GUARANTEES, SECURITY AND MATERIAL INTEREST P TRANSACTIONS mandatory SECTION Q: RELATED PARTY DISCLOSURES R SECTION R: SUMMARISED FINANCIAL STATEMENTS Note: Sections D, H, I, K, M, N and O are not used. DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Response Ref Comments/links ] This guide is derived from the NAO FReM disclosure guide, but sections that are not applicable or are extremely unlikely to be applicable to charitable NDPBs have been deleted. This section sets out the assumptions made and the areas not covered by this disclosure guide. These Initial Questions are designed to identify the relevant sections to be completed for each individual set of accounts. The answer to these questions will generally be “Yes” or “N/A”. The answer “No” indicates that a Supplement sheet must be completed or a problem that needs to be resolved. Structure of the Accounts IQ1 Have the following been produced: • Trustees‟ [Annual] Report? SORP 36 FReM 5.2.1 • Statement of Trustees‟ and Accounting Officer‟s Responsibilities? FReM 5.1.1 • Statement on Internal Control? FReM 5.1.1 • C&AG‟s Certificate and Report? FReM 5.1.1 IQ2 Do the financial statements comprise the following: • Statement of Financial Activities (SOFA) and associated notes? SORP 30 (a) • Balance Sheet and associated notes? SORP 30 (c) • Cash Flow Statement and associated notes? SORP 30 (d) • Accounting Policies? SORP 30 (e) • Other notes? SORP 30 (e) IQ3 Do the financial statements comprise the following, where applicable: • Consolidated balance sheet? SORP 383 • Consolidated SOFA? SORP 383 • Summary financial statements? SORP 34 Confirm the validity of the following assumptions contained in this checklist IQ4 The charitable NDPB is not required to produce segmental analysis SSAP 25.30 - 25.31, 25.34 under SSAP 25 (beyond the normal functional analysis of income and expenditure under the SORP) and there have been no acquired or discontinued operations per FRS 3. If the charitable NDPB is required to produce segmental analysis, or Supplement C2 analysis of acquisitions, continuing or discontinued operations, complete Supplement C2 (click on right to obtain). IQ5 The charitable NDPB has no capitalisable intangible fixed assets. FRS 10.9 - 10.14 If the charitable NDPB does have capitalisable intangible fixed assets, Supplement E2 complete Supplement E2 (click on right to obtain). IQ6 The charitable NDPB has no associated undertakings or joint ventures. FRS 9 If the charitable NDPB does have associates or joint ventures, complete Supplement H Supplement H (click on right to obtain). IQ7 The charitable NDPB has included all subsidiary undertakings in its SORP 383 FRS 2.25 - 2.32 consolidated accounts. IQ8 The charitable NDPB is not itself a subsidiary. CA 2006 § 400 (1) IQ9 The charitable NDPB wholly owns all subsidiaries (i.e. there are no FRS 2.13, 2.35 - 2.38 FRS 2.45 - 2.52 minority interests) and has not undertaken any acquisitions, disposals, FRS 6 mergers, part acquisitions, or part disposals (i.e. there have been no FRS 7 changes in the composition of the group, or the stake held by the parent). IQ10 The charitable NDPB does not act as a lessor (except in respect of any SSAP 21.38 - 21.44, 21.58 - 21.60 investment property). IQ11 The charitable NDPB has no research and development in terms of SSAP 13 SSAP13. IQ12 The charitable NDPB has no long term contract work in progress. SSAP 9.22, 9.28 - 9.30 IQ13 The charitable NDPB has no consignment stock, sale and repurchase FRS 5 Application Notes A-E agreements, securitisations or loan transfers. IQ14 The charitable NDPB is exempt from corporation tax and there is no FRS 16 SSAP15 deferred tax liability, except where arising in a trading subsidiary. DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref SECTION A: GENERAL, ACCOUNTS STRUCTURE AND ACCOUNTING POLICIES A1 GENERAL A1.1 Have the title and period of accounts been correctly stated? A1.2 Have the duration of the current and previous accounting periods been SORP 31 shown? A1.3 Where the accounts are prepared for a period other than 12 months, have Reg Sch 2 1 (1) (w) Reg 3 (4) (b) the reasons for this been stated in the notes to the accounts? A1.4 Have all figures been rounded to the nearest £ or £000 as far as practicable? A1.5 Do totals in the supporting notes cross-reference and agree exactly to the figures in the prime statements? A1.6 Have all figures appearing in other published accounts (e.g. sponsor department's Resource Accounts) been cross-checked and agreed or reconciled? A1.7 Have the accounts been prepared in the format specified in the accounts FReM 1.4.1 direction, SORP, FReM or other relevant legislation ? Note (1): where it is necessary to divert from the SORP or the FReM to any FReM 2.2.6 FReM 2.2.7 material extent, the particulars of the departure, the reasons for it, and the CA 2006 §§ 393 (15) to (24) impact on the financial statements should be disclosed - see A6.2. Note (2): there is no requirement to reproduce the accounts direction. A1.8 Have the accounts been prepared on the going concern basis and accruals SORP 60 concept and do they provide information that is relevant, reliable, comparable and understandable? A1.9 Has any material irregularity been disclosed? A1.10 Has everything necessary to give a true and fair view been disclosed? FReM 2.2.6 CA 2006 §§ 393 SORP 60 A1.11 Has the entity produced a combined annual report and accounts? FReM 5.1.1 A2 ACCOUNTS STRUCTURE A2.1 Have the following been included in accounts prepared on an accruals basis: (a) a Statement of Financial Activities (SOFA) for the year that: SORP 30 (a) (i) shows all incoming resources? (ii) shows all resources expended? (iii) reconciles all changes in the charitable NDPB's funds? (iv) consists of a single set of accounting statements and, where the charitable NDPB operates more than one class of fund, is presented in columnar form? (b) an income and expenditure account where this is a legal requirement SORP 30 (b) or the entity is required to do so by the relevant authority? (c) a summarised income and expenditure account where the charitable FReM 1.4.3 NDPB is directed to do so by its sponsoring department? (d) a balance sheet that shows for the charitable NDPB its: SORP 30 (c) (i) recognised assets? (ii) liabilities? (iii) different categories of fund? (e) a cash flow statement in accordance with accounting standards? SORP 30 (d) (f) notes explaining the accounting policies adopted? SORP 30 (e) (g) other notes which explain or expand upon the information contained in SORP 30 (e) the accounting statements referred to above or which provide further useful information? Note: the SOFA, the income and expenditure account (or summary), the SORP 32 balance sheet and the cash flow statement are all considered to be “primary statements”, and should therefore be given equal prominence in the accounts and should not be relegated to the notes to the accounts. A3 ACCOUNTING FOR SEPARATE FUNDS Note: for charities that have to account for more than one fund under their SORP 65 control, the accounts should provide a summary of the main funds, differentiating in particular between the unrestricted income funds, restricted income funds and endowment funds. The columnar format of the SOFA (and of the balance sheet, where the option is taken to use a columnar presentation of funds) is designed to achieve this. Depending on the materiality of each, the notes to the accounts should group the restricted funds under one or more heads. A3.1 Has income generated from assets held in an unrestricted fund been SORP 67 disclosed as unrestricted income? Note: a fund which is available to the Trustees to apply for the general SORP 67 purposes of the charitable NDPB as set out in its governing document, is the charitable NDPB‟s “unrestricted” fund (sometimes called a “general” fund). A3.2 Where the Trustees have set aside part of the charitable NDPB‟s SORP 68 IS 2 5.3 - 5.8 unrestricted funds to be used for particular purposes in the future, have such sums been accounted for as part of the charitable NDPB‟s unrestricted funds and described as “designated funds”? Note: when a designation has been made at the balance sheet date, the SORP App 2 "FRS 21" amount of the designation may be adjusted subsequent to the year end if more accurate information becomes available. A3.3 Where funds are held that can only be applied for particular purposes within SORP 69 the charitable NDPB's objects, have such funds been disclosed as restricted funds and have they been separately accounted for? A3.4 Has income generated from assets held in a restricted fund been treated as SORP 69 restricted income, except where either the terms of the original restriction specifically say otherwise or the restricted fund is an endowment fund, the income of which is expendable at the discretion of the trustees? A3.5 Has all income derived from assets held in an endowment fund been SORP 69 included within unrestricted funds in the SOFA, except where the application of the income is restricted to a particular purpose, in which case has the income and expenditure been appropriately identified in restricted funds? A3.6 Where expenses have been incurred in the administration or protection of SORP App 3.3 (c) the endowment fund, have these been charged against the capital of the investments in the fund? Note: only where the trusts of the charitable NDPB provide to the contrary, SORP App 3.3 (c) or there are insufficient funds in the endowment to meet such costs, can they be charged against other funds held by the charitable NDPB. A3.7 Where the Trustees must permanently maintain the whole of a capital fund SORP 70 for the benefit of the charitable NDPB, has the fund been disclosed as a permanent endowment within restricted funds? A3.8 Where the Trustees have the power to convert endowed capital into income, SORP 71 has this fund been disclosed as an expendable endowment within restricted funds? A3.9 Has the initial gift and subsequent increases and decreases in the amount of SORP 72 any endowment fund been shown in the SOFA as part of those funds? A3.10 Have realised and unrealised gains or losses, provisions for depreciation or SORP 73 a permanent fall in value been included as part of the particular fund in which the assets are held? A3.11 In the notes to the accounts, has information been provided on the structure SORP 75 of the charitable NDPB‟s funds so as to disclose the fund balances and the reasons for them, differentiating between unrestricted income funds (both general and designated), restricted income funds, permanent endowment and expendable endowment, as well as identifying any material individual funds among them? A3.12 Have the assets and liabilities representing each type of fund of the SORP 75 (a) charitable NDPB been clearly summarised and analysed (e.g. investments, fixed assets, net current assets) between those funds in a note to the financial statements (unless this information is presented in a columnar balance sheet)? A3.13 Has disclosure been given of how each of the charitable NDPB's funds has SORP 75 (b) Reg Sch 2 1 (1) (i) arisen (including designated funds), the restrictions imposed and the purpose of each fund? Note: an indication should also be given as to whether or not sufficient SORP 75 (b) resources are held in an appropriate form to enable each fund to be applied in accordance with any restrictions. For example, if the charitable NDPB has a fund which is to be spent in the near future, it should be made clear in the notes whether or not the assets held (or expected to be received) in the fund are liquid assets. A3.14 Has any fund in deficit been separately disclosed and an explanation given in SORP 75 (c) Reg Sch 2 1 (1) (m) the Trustees‟ Annual Report (see B1.13 (d))? Note: designated funds should never be in deficit. SORP 75 (c) A3.15 Have material transfers between different funds and allocations to SORP 75 (d) Reg Sch 2 1 (1) (i) designated funds been separately disclosed, without netting off, and accompanied by an explanation of the nature of the transfers or allocations and the reasons for them? A3.16 Where, in relation to permanent endowment, a total return approach to SORP 75 (e) investments has been adopted, have particulars of the movements in the value of the unapplied total return for the financial year been given in the notes to the accounts, and has a reconciliation of the balance held as unapplied total return at the beginning of the financial year with that at the end of the financial year been included? A3.17 In consolidated accounts, are funds or reserves retained by subsidiary SORP 406 undertakings (other than funds available to be used in carrying out the charitable NDPB‟s objects) included under an appropriate separate fund heading in the balance sheet (e.g. funds retained within a non-charitable subsidiary)? A4 BRANCHES A4.1 Have the gross transactions and balances of branches (after eliminating any SORP 77-81 intra-charity transactions and balances) been included in the accounts? Note: a branch is legally part of the parent charitable NDPB, i.e. would use SORP GL 4 the same charity registration number. Branch transactions and balances form part of the charitable NDPB‟s own accounts. Any body which is a separate legal entity is by definition not a branch. Any controlled separate legal entities, such as another charitable NDPB with its own charity registration number or a trading company, should be consolidated into group accounts in accordance with FRS 2. A5 PRIOR PERIODS A5.1 Have comparative figures been shown in the accounts in accordance with SORP 31 Reg 8 (6) generally accepted accounting practice, and have they been checked to the FRS 3.30 previous year‟s certified accounts? FRS 28.6 and 28.10 A5.2 Where the corresponding amounts from the preceding year‟s accounts are Reg 8 (8) FRS 28.9 and 28.10 not directly comparable with this year‟s, have they been adjusted to match the current year‟s accounts format and an explanation given? A5.3 Where there is a change in format from the previous year, have details of FRS 28.10 (b) this together with the reasons for the change been disclosed? A5.4 Have any prior year adjustments been accounted for by: (a) restating the corresponding figures for the preceding year and adjusting FRS 3.29 the opening balances of reserves for the cumulative effect? (b) disclosing the effects adequately? FRS 3.29 A5.5 Where there are prior period adjustments, have the following been disclosed: (a) the effect on the current and preceding years' results? FRS 3.29 FRS 18.55 SORP 361 (b) the reasons for the adjustments (i.e. fundamental error, or change in FRS 3.63 SORP 361 accounting policy, with details)? FRS 3.63 Note: FRS 3.63 defines when an error is fundamental and a prior period adjustment is justified. It states that "in exceptional circumstances it may be found that financial statements of prior periods have been issued containing errors which are of such significance as to destroy the true and fair view and hence the validity of those financial statements". This goes beyond an error being merely material . Audit teams are advised to contact the FAS team when they are considering whether a prior period adjustment is required on the basis of 'fundamental error'. (c) for prior period adjustments due to a change in accounting policy, a FRS 18.55 brief explanation of why each new accounting policy is thought more appropriate? (d) the cumulative effect of the adjustments on funds brought forward in FRS 3.29 the movements on funds section of the SOFA? A5.6 Has the effect of including in the SOFA any amount relating to a preceding year been disclosed? A6 ACCOUNTING POLICIES - GENERAL A6.1 Has a statement been included in the notes to the accounts that they have SORP 358 been prepared in accordance with: the provisions of the Charities SORP FRS 18 58 currently in effect; applicable accounting standards; the Charities Act or FReM 2.1.4 other legislative requirement; and the historic cost basis of accounting except for investments and fixed assets (which are included at revalued amounts)? Note: accounting policies can be expected to describe the basis on which the financial statements have been prepared. This basis will generally be set out in the entity's Accounts Direction and relevant legislation and might refer to the accounts having been prepared in accordance with the SORP and the FReM, the accounting convention adopted; and, where appropriate, the basis of consolidation. A6.2 Where, exceptionally, it is necessary to depart from the requirements of the SORP 21 and 359 Reg 8 (4) (d) and Sch 2 1 (1) (x) SORP, the FReM, accounting standards or UITF abstracts or any other CA 2006 § 396 (5) statutory requirement in order to meet the overriding need to give a true and fair view, have the following been disclosed: (a) a clear, unambiguous statement that there has been a departure from FRS 18.62 (a) the requirements of the SORP, FReM, accounting standard, UITF, or legislation, and that the departure is necessary to give a true and fair view? (b) descriptions of both the treatment adopted and how this differs from the SORP 359 (a) FRS 18.62 (b) normal SORP/UK GAAP treatment? (c) a statement of why the prescribed treatment would not give a true and SORP 359 (b) FRS 18.62 (c) fair view and why the Trustees judge that the treatment adopted is more appropriate to the charitable NDPB's particular circumstances? (d) a statement of how the accounts are different as a result of the FRS 18.62 (d) departure? Comments/links DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref SECTION B: TRUSTEES’ ANNUAL REPORT, REMUNERATION REPORT, ACCOUNTING OFFICER'S RESPONSIBILITIES, STATEMENT ON INTERNAL CONTROL #REF! FReM 5.2.1 Note (1): the FReM states that charitable NDPBs should follow the FReM 1.4.7 requirements of the SORP and regulations made under charities legislation, SORP 38 but also requires charitable NDPBs to follow the principles set out in the FReM, including providing additional disclosures where the FReM requirements go beyond those required by the SORP or other charities legislation. Thus in accordance with charities legislation and the SORP, charitable NDPBs should prepare a Trustees‟ Annual Report. But this should also take account of all the disclosures required for an annual report as set out in the FReM section 7.2, where these go beyond, but are not inconsistent with, the disclosures required by the SORP and other charities legislation. The SORP clearly sets out that neither legal requirements nor the SORP itself limit the inclusion of other information within the Trustees' Annual Report or as additional information accompanying the accounts (such as, for example, a remuneration report). Note (2): this guide alone should not be used as a template for determining the content of the Trustees' Annual Report - source material should also be consulted. B1 TRUSTEES' ANNUAL REPORT Note (1): the FReM requires as part of the annual report a Management FReM 5.2.8 - 11 CA 2006 §417 (1) Commentary, which should disclose the matters required to be disclosed in the business review under section 417 of the Companies Act 2006, taking into consideration the recommendations outlined in the ASB's Reporting Statement Operating and Financial Review (RS), as interpreted by the FReM. However, a separately identifiable section of the Trustees' Annual Report labelled "Management Commentary" is not required. Note (2): the structure of this section of the guide follows that of the SORP, with the requirements arising from other charities legislation, the FReM, the Companies Act and the Reporting Statement included within the relevant sections or appended to the SORP requirements as appropriate. Where the additional requirements are covered by SORP requirements, the SORP requirement is given, expanded and cross-referenced as appropriate. Financial year B1.1 Has the financial year to which the Trustees' Annual Report relates been Reg 40 (2) (a) specified? Reference and Administrative Details of the charitable NDPB, its Trustees and Advisers B1.2 Has the following information about the charitable NDPB, its trustees and advisers been included in the Trustees' Annual Report: (a) the name of the charitable NDPB, the name by which it is registered and any SORP 41 (a) Reg 40 (3) (a) other names by which it is known? (b) the charity registration number, and company registration number where SORP 41 (b) Reg 40 (3) (b) applicable? (c) the address of the principal office of the charitable NDPB, and of the SORP 41 (c) Reg 40 (3) (c) registered office where it is a company? (d) any additional information required by law to be reported, or in order for the SORP 23 accounts to comply with current statutory requirements, or by the requirements of the charitable NDPB‟s governing document (to the extent that these exceed statutory requirements)? (e) confirmation that the accounts comply with: SORP 23 (i) statutory requirements? (ii) the governing document? (iii) the SORP? (f) the names of all of those who were Trustees on the date the report was SORP 41 (d) and (e) Reg 40 (3) (d), (e), (f) and (g) approved, and of any others who were Trustees in the financial year in question? Note: where the charitable NDPB has more than 50 trustees, the names of at Reg 40 (5) least 50 trustees, including any trustee who is also an officer of the charitable NDPB, should be included. (g) where any of the Trustees are a body corporate, the names of the directors SORP 41 (d) Reg 40 (3) (d) of the body corporate on the date the report was approved? Note: "trustees" covers both the Charitable NDPB's trustees, and trustees for SORP 41 (d) the charitable NDPB. Refer to SORP GL 7 and GL 59 for definition of these terms. (h) the name of any Chief Executive Officer or other senior staff member(s) to SORP 41 (f) FReM 5.2.6 c) and d) whom day to day management of the charitable NDPB is delegated by the Trustees? (i) the names and addresses of other relevant organisations including those SORP 41 (g) acting as auditors or reporting accountants, bankers, investment advisors and solicitors? (j) where, because the disclosure of the names of any Trustees, senior staff SORP 42 Reg 40 (5) (a) and (b) members or persons with power of appointment, or of the charitable NDPB's principal address could lead to those people being placed in personal danger, the Trustees have dispensed with these disclosures (provided that the Charity Commission or other relevant authority has given the Trustees the authority to do so), the reasons for such non-disclosure? Note: the disclosure of the reasons for non-disclosure is not mandatory, but SORP 42 recommended. Structure, Governance and Management B1.3 Has the following information been included in the Trustees' Annual Report: (a) the nature of the governing document, the date where known, and the SORP 44 (a) Reg 40 (3) (h) constitution of the charitable NDPB? (b) a brief history of the charitable NDPB and its statutory (or equivalent) FReM 5.2.11 h) background? (c) the methods adopted for the recruitment and appointment of new Trustees, SORP 44 (b) Reg 40 (3) (i) and details of any constitutional provisions relating to appointments (e.g. election to post)? (d) where any other person or body is entitled to appoint one or more of the SORP 44 (b) Reg 40 (3) (i) Trustees, an explanation of this and the name of that person or body? (e) the policies and procedures adopted for the induction and training of SORP 44 (c) Reg 40 (3) (j) Trustees? (f) a description of the organisational structure and how decisions are made SORP 44 (d) Reg 40 (3) (k) (e.g. the types of decisions taken by the Trustees and the types delegated to staff)? (g) an explanation of the relationship of the charitable NDPB with any wider SORP 44 (e) network (e.g. charities affiliated within an umbrella group) and any impact this has on the charitable NDPB's operating policies? (h) the relationships between the charitable NDPB and related parties, including SORP 44 (f) its subsidiaries and with any other charities and organisations with which it co- operates in the pursuit of its charitable objectives? (i) details of company directorships and other significant interests held by FReM 5.2.11 k) Trustees which may conflict with their management responsibilities? Note: where a Register of Interests that is open to the public is maintained, FReM 5.2.11 k) disclosure may be limited to how access to the information in that Register may be obtained. (j) where an individual political donation, or political expenditure, or such CA § 416 (4) donations and expenditure in aggregate, has exceeded £2000 (including any SI 2008/410 Sch 7 para 3 such donations or expenditure made or incurred by the charitable NDPB's subsidiaries), the names of the recipients, the total amount(s) donated, and the total amount of political expenditure? (k) the total amount of any contributions made to a non-EU political party CA § 416 (4) (including any contributions made by the charitable NDPB's subsidiaries)? SI 2008/410 Sch 7 para 4 (l) a statement giving details of charitable donations where they are in excess of CA § 416 (4) £2000 in aggregate? SI 2008/410 Sch 7 para 5 (m) a statement confirming that the major risks to which the charitable NDPB is SORP 45 Reg 40 (2) (b) (ii) (ee) exposed, as identified by the Trustees, have been reviewed and systems or procedures have been established to manage those risks? Note: charitable NDPBs should produce a statement on internal control (SIC) in FReM 5.3.3 line with the provisions of FReM 7.3.3. The SIC goes beyond the requirements of SORP para 45. See B4.2 for details of the content to be included within the SIC. (n) sickness absence data? FReM 5.2.11 m) (o) personal data related incidents? FReM 5.2.11 o) B1.4 Have the following statements been included in the Trustees' Annual Report: (a) that the Trustees have complied with the duty in section 4 of the Charities Reg 40 (2) (c) (ii) Act 2006 to have due regard to guidance published by the Charity Commission been included in the Trustees' Annual Report? (b) where the entity is a Public Sector Information Holder, that the charitable FReM 5.2.11 n) NDPB has complied with the cost allocation and charging requirements set out in HM Treasury and Office of Public Sector Information guidance? Note: the Treasury Officer of Accounts team should be consulted where the FReM 5.2.11 n) charitable NDPB seeks an exemption from these FReM requirements on the grounds of commercial sensitivity. (c) that the accounts have been prepared under a direction, including who FReM 5.2.11 g) issued that direction and the legislation under which the direction was issued? Objectives and Activities B1.5 Has the following information been included in the Trustees' Annual Report: (a) a summary of the objects of the charitable NDPB as set out in its governing SORP 47 (a) document? (b) an explanation of the charitable NDPB's aims including the changes or SORP 47 (b) Reg 40 (2) (b) (ii) (aa) differences it seeks to make through its activities? (c) the legislative, regulatory, operational and external environment in which the CA 2006 § 417 (3) (a) RS paras 22, 27 (a) and 30-32 charitable NDPB operates? (d) an indication of the existence of branches of the charitable NDPB outside the SI 2008/410 Sch 7 - (7)(1)(d) UK? Note: the term "branches" here does not have the same meaning as in the Co Act 2006 § 1046(3) SORP (GL 4 - see A4.1). For the definition of these branches, the legislation refers ultimately to the Eleventh Company Law Directive (89/666/EEC), though this does not in fact contain such a definition. It is highly unlikely that a charitable NDPB covered by this guide has branches outside the UK, but where this is, or may be, the case, please consult the NAO Financial Audit Support Team. (e) an explanation of the charitable NDPB's main objectives for the year? SORP 47 (c) Reg 40 (2) (b) (ii) (aa) CA 2006 § 417 (3) (a) RS paras 22, 27 (a) and 36-37 (f) an explanation of the charitable NDPB's strategies for achieving its stated SORP 47 (d) Reg 40 (2) (b) (ii) (aa) objectives? CA 2006 § 417 (3) (a) RS paras 22, 27 (a) and 36-37 (g) details of the significant activities (including main programmes, projects, or SORP 47 (e) SORP 48 services provided) that contribute to the achievement of the stated objectives, Reg 40 (2) (b) (ii) (aa) focusing on those activities that the Trustees consider to be significant in the CA 2006 § 417 (3) (a) RS paras 22, 27 (a) and 30-32 circumstances of the charitable NDPB as a whole? Note: the details of activities should, as a minimum, explain the objectives, SORP 48, 191 - 194 activities, projects or services identified within the analysis note accompanying charitable activities in the SOFA. (h) where the charitable NDPB conducts a material part of its activities through SORP 49 grant making, a statement setting out its grant making policy? (i) where social or programme related investment activities are material in the SORP 50 context of charitable activities undertaken, an explanation of the policies adopted in making such investments? (j) an indication of research and development activities? CA § 416 (4) SI 2008/410 Sch 7 para 7 (1) (c) (k) where the charitable NDPB makes significant use of volunteers in the course SORP 51 Reg 40 (2) (b) (ii) (cc) of undertaking its charitable or income generating activities, an explanation of their role and contribution? Note: while measurement issues, including attributing an economic value to SORP 51 such unpaid voluntary contributions, prevent the inclusion of such contributions within the SOFA, it is nevertheless important for readers to be provided with sufficient information to understand the role and contribution of volunteers. Such information may, for example, explain the activities that volunteers help provide, quantify the contribution in terms of hours or staff equivalents, and may present an indicative value of this contribution. Achievements and Performance B1.6 Has the following information been included in the Trustees' Annual Report: (a) a review of charitable activities undertaken that explains the performance SORP 53 (a) Reg 40 (2) (b) (ii) (bb) achieved against objectives set? (b) an analysis using financial key performance indicators? SORP 53 (a) CA 2006 § 417 (6) (a) RS paras 3, and 38-40 (c) where appropriate, analysis using other key performance indicators, SORP 53 (a) CA 2006 § 417 (6) (b) including information relating to environmental matters and employee matters? RS paras 3, 38-40 and 41-42 B1.7 For each key performance indicator disclosed, has the following information been RS 76 disclosed: (a) information to allow stakeholders to understand each key performance RS para 75 indicator? (b) the definition of the key performance indicator and its calculation method? RS para 76 (c) the purpose of the key performance indicator? RS para 76 (d) the source of underlying data, and where relevant, an explanation of any RS para 76 assumptions? (e) quantification or commentary on future targets? RS paras 76 and 77 (f) where information from the financial statements has been adjusted, the fact RS para 76 that this has been done and a reconciliation of the amounts? (g) where available, corresponding amounts for the previous financial year? RS para 76 (h) any changes to key performance indicators and the calculation method used RS para 76 compared to previous financial years? B1.8 For each quantified measure, other than a key performance indicator, disclosed, RS 78 has the following information been disclosed: (a) the definition of the measure and its calculation method? (b where available, the corresponding amount for the previous financial year? Note: in reporting on key performance indicators, charitable NDPBs should report FReM 5.2.10 progress against those targets agreed with the Minister and normally promulgated by means of a Parliamentary question. B1.9 Has the following information been included in the Trustees' Annual Report: (a) where material fundraising activities are undertaken, details of the SORP 53 (b) performance achieved against fundraising objectives set, commenting on any material expenditure for future income generation and explaining the effect on the current period's fundraising return and anticipated income generation in future periods? (b) where the charitable NDPB holds extensive estates: Comments/links DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref Comments/links SECTION C: STATEMENT OF FINANCIAL ACTIVITY (SOFA) AND RELATED NOTES C1 STRUCTURE OF THE SOFA C1.1 Has it been made clear in the SOFA where the charitable NDPB's resources SORP 83 came from and what it spent its resources on during the year? C1.2 Have the charitable NDPB's resources been analysed between: SORP 83 (a) incoming resources? (b) resources expended? C1.3 Has, as a minimum, the following been separately and clearly identified in SORP 83 and 74 the SOFA: (a) unrestricted income funds? (b) restricted income funds? (c) endowment funds (permanent and expendable combined)? C1.4 Has the following been shown, in columnar format, on the SOFA: SORP 84 and 74 Reg Sch 2 1 (1) (i) (a) movements in the different types of funds? (b) total movements of all the funds? Note: comparative figures for the previous financial year, given on the face SORP 84 of the statement will normally only be given for the row totals (e.g. voluntary income, investment income etc) rather than for the analysis of each row across the various categories of funds. C1.5 Where the charitable NDPB has discontinued any of its operations or SORP 90 acquired new ones, has the following been separately and clearly identified in the accounts: (a) continuing operations? (b) acquisitions (excluding any that are also discontinued in the same period) as a component of continuing operations? (c) discontinued operations? Note (1): this disclosure is required in order to comply with FRS 3. SORP 90 'Operations' will normally apply to the whole of a distinctive type of activity of the charitable NDPB but not to the development or cessation of new projects within that activity. Note (2): if there are acquisitions or discontinued operations, refer to Link to "Initial questions" sheet Supplement C2 Supplement C2. Click on "link" to see question 3 of "Initial Questions" sheet Note: this link only works if "Supplement C2" sheet has been activated in the to obtain this supplement. "Initial questions" sheet. C1.6 Where the charitable NDPB has no material acquisitions or discontinued operations, has a statement that all activities are classed as continuing been included at the foot of the SOFA? C1.7 Have the following sections been included in the SOFA: (a) total incoming resources, classified by activity category? SORP 85 and Table 3 (b) total resources expended, classified by activity category? SORP 85 and Table 3 (c) columns totalled to show net incoming/outgoing resources before SORP 85 and Table 3 transfers? (d) details of all gross materials transfers between funds? SORP 85 and Table 3 (e) net incoming/outgoing resources for the year before other recognised SORP 85 and Table 3 gains and losses? (f) other recognised gains/losses, showing, where appropriate, gains or SORP 85 and Table 3 losses on revaluation of fixed assets for the charitable NDPB‟s own use, gains or losses on investment assets, and actuarial gains or losses on defined benefit pension schemes? (g) columns totalled to show net movement in different types of funds for SORP 85 and Table 3, 84 the year? (h) net movement in total charitable NDPB funds, and opening and SORP 85 and Table 3, 84 closing total funds as shown on the balance sheet? Note: for further guidance, refer to SORP Table 3. SORP Table 3 C1.8 Has the SOFA been totalled across (by activity category of incoming SORP 85 and Table 3 resources and resources expenditure) and down (by class of fund)? C1.9 Have the comparative amounts for the previous period been shown for row SORP 84 totals? C1.10 Has the structure of the SOFA been expanded, where necessary by using SORP 89 notes, in order to present a true and fair view and convey a proper understanding of the nature of all the charitable NDPB's activities? Note: disclosure requirements should always be met and the underlying SORP 86 structure should not be changed. C1.11 Has a clear link between the incoming and outgoing resources and in SORP 89 particular activity analysis been, as far as possible, provided? C1.12 Where, as a result of adopting the activity approach, the categories shown in SORP 92 the SOFA change from those used in the prior year, have comparatives been restated in accordance with FRS 18? C1.13 Have category headings been omitted where there is nothing to report in SORP 91 both the current and preceding periods? Note: the charitable NDPB may also vary the order in which it presents SORP 91 activity categories within the incoming resources and resources expended sections of the SOFA to meet its own presentational needs. C1.14 Has a statement that all recognised gains and losses have been included in FRS 3 57 the SOFA been given at the foot of the SOFA? C2 INCOMING RESOURCES C2.1 Have all incoming resources accruing to the charitable NDPB been included SORP 94 in the SOFA where the effect of a transaction or other event results in an increase in its assets? Note: an increase in assets will occur where the charitable NDPB has SORP 94 entitlement, receipt is virtually certain, and the monetary value of the incoming resource can be measured with sufficient reliability. C2.2 Have all incoming resources been reported gross? SORP 95 C2.3 Have incoming resources been analysed according to the activity that SORP 118 produced the resources, grouping separately those resources generated by charitable activity and those activities aimed primarily at generating funds? C2.4 Where resources are generated from several activities, has the basis for and SORP 119 the method of the apportionment of the resources between the activities been disclosed in a note to the accounts? Note: the basis for the apportionment of the resources between the SORP 119 activities should be reasonable, justifiable and consistent. C2.5 Have the following, where material, been shown separately in the SOFA: SORP 121 (a) incoming resources from generated funds, including: (i) voluntary income ? SORP Table 3 and 121 Note: for a definition of voluntary income, refer to SORP GL 61. SORP GL 61 (ii) activities for generating funds? SORP Table 3 and 137 (iii) investment income ? SORP Table 3 and 140 Note: investment income includes incoming resources from SORP 140 investment assets, including dividends, interest and rents, but excluding realised and unrealised investment gains and losses. (b) incoming resources from charitable activities? SORP Table 3 and 143 (c) other incoming resources? SORP Table 3 and 147 Recognition of incoming resources C2.6 Have the following incoming resources not been deferred: (a) income charged for the provision of goods and/or services except SORP 98 where the goods and/or services have not yet been provided? Note: some charities earn income by providing goods and/or services in SORP 98 return for a fee as part of their charitable activities. Such contractual income (SORP GL 57) is recognised as incoming resources in the SOFA to the extent that the charitable NDPB has provided the goods or services. Where such incoming resources are received in advance then the charitable NDPB may not have entitlement to these resources until the goods or services have been provided. In this situation incoming resources received in advance should be deferred (SORP GL 15) until the charitable NDPB becomes entitled to the resources. (b) grants or donations without pre-conditions, even where the resources SORP 110 are received in advance of the expenditure on the activity funded by the grant or donation? Note: charities are normally entitled to incoming resources when they SORP 110 are receivable. Recognition of a grant or donation without pre-conditions should not be deferred (SORP GL 15) even if the resources are received in advance of the expenditure on the activity funded by the grant or donation. In such cases the charitable NDPB has entitlement to the resource with the timing of the expenditure being within the discretion of the charitable NDPB. Such incoming resources cannot be deferred simply because the related expenditure has not been incurred. Similarly, a condition that allows for the recovery by the donor of any unexpended part of a grant does not prevent recognition. A liability for any repayment is recognised when repayment becomes probable. (c) incoming resources given specifically to provide a fixed asset, or SORP 111 and 117 where a fixed asset is donated? C2.7 Where entitlement to the incoming resources is derived from performance- SORP 99 related grants that are conditional upon the delivery of a specified level of service, have they been recognised as incoming resources only to the extent that the charitable NDPB has provided the services or goods? Note: certain grant funding arrangements may contain conditions that SORP 99 closely specify the service to be performed by the charitable NDPB. The terms of such funding may be set out in a service level agreement where the conditions for payment are linked to the performance of a particular level of service or units of output delivered. C2.8 Where the charitable NDPB receives membership subscriptions, have these SORP 101 been recognised in the SOFA according to the substance of their nature? C2.9 Where the charitable NDPB receives incoming resources in respect of its SORP 103 performance under a long-term contract, have these resources been recognised only to the extent that the charitable NDPB has entitlement to the consideration? C2.10 Where the existence of a condition prevents the recognition of an incoming SORP 109 SORP 340 - 348 resource, has a contingent asset been disclosed where it is probable (but not virtually certain) that the condition will be met in the future? C2.11 Where incoming resources have been deferred, have the following been SORP 114 disclosed in the notes to the accounts: (a) an explanation of the reasons for the deferrals? (b) an analysis of the movement on the deferred account between: (i) incoming resources deferred in the current year? (ii) amounts released from previous years? Note (1): incoming resources of a similar nature can be grouped together in SORP 114 the notes to the accounts as appropriate. Note (2): the fact the income is restricted is not sufficient reason to defer SORP 116 recognition of income. Funds received as agent C2.12 Where incoming resources (except for EU income - see C2.20) do not SORP 112 FReM 2008/09 11.2.12 belong to the charitable NDPB and the Trustees, acting as agent, are legally bound to pay the resources over to a third party, have these resources been excluded from the SOFA? C2.13 Where the charitable NDPB holds or has held resources for a third party SORP 115 which have not been included in the SOFA, has an analysis of the movement of these resources during the year relating to each party or type of party, where material, been provided in the notes to the accounts? C2.14 Where the Trustees act as principal and have responsibility for the charitable SORP 113 application of funds prior to their transfer to a third party, have these resources been included in the SOFA and balance sheet? Grants/grant in aid C2.15 Where the charitable NDPB receives grant in aid that is intended to finance FReM 5.2.45 b) both revenue and capital expenditure, has an analysis of the grant in aid between its constituent parts been provided? C2.16 Have grants from UK government entities and grants from the European FReM 5.2.46 a) Union been separately and clearly identified in the notes to the financial statements? C2.17 Where the charitable NDPB prepares a summarised income and FReM 5.2.46 b) expenditure account in addition to the SOFA, and accounts for capital grant by crediting it to a capital assets fund on the balance sheet, has an adjustment between the SOFA and the income and expenditure account to take the capital grant to the capital assets fund and to credit the income and expenditure account with movements in the capital assets fund to offset depreciation over the life of the asset been made? Note: this is a requirement of the FReM 2008/09, it is no longer required in 2009/10. C2.18 Where the results for the period are affected by the receipt of forms of FReM 5.2.42 SSAP 4 28 (c) government assistance other than grants, have the nature of the assistance and an estimate of the effect on the financial statements been disclosed? C2.19 Has any potential liability to repay grants been disclosed? FReM 5.2.42 SSAP 4 29 EU income C2.20 Has all EU income, except for receipts to be transferred to other member FReM 11.2.12 states or mandated bodies in other member states in respect of EU twinning projects, been treated as income and shown separately, split between that received by the entity acting as an agent for the EU in making payments to third parties in the UK, and that received to fund the charitable NDPB's own expenditure? C2.21 Have receipts to be transferred to other member states or mandated bodies FReM 11.2.12 in other member states in respect of EU twinning projects been treated as third party assets? C3 VOLUNTARY INCOME C3.1 Where material, have details of the types of activities undertaken to generate SORP 122 voluntary income been provided either on the face of the SOFA or in the notes to the financial statements? Note: as far as possible the analysis categories provided here should match SORP 122 the detailed analysis provided for the costs of generating voluntary income. C3.2 Have incoming resources generated from the following sources been included in voluntary income: (a) gifts, donations and any related gift aid claimed, including legacies, SORP 121 (a) given by the founders, patrons, supporters, the general public and businesses? (b) grants which provide core funding or are of a general nature provided SORP 121 (b) by government and charitable foundations, but not including those grants which are specifically for the performance of a service or production of charitable goods (e.g. a service agreement with a local authority)? Note: the treatment of restricted grants is discussed in SORP IS 1 3.1 - 3.4 Information Sheet 1 section 3. (c) membership subscriptions and sponsorships where these are, in SORP 121 (c) substance, donations rather than payment for goods or services? (d) gifts in kind, and donated services and facilities? SORP 121 (d) C3.3 Have grants and donations been recognised as soon as there is evidence of SORP 104 entitlement? Note: a pre-requisite of recognition of a promised grant or donation is SORP 104 evidence of entitlement. Where entitlement is demonstrable, and no conditions are attached, such promises should be recognised as incoming resources once the criteria of certainty and measurability are met. C3.4 Where grants or donations are received with conditions attached that must SORP 105 be fulfilled before the charitable NDPB has unconditional entitlement (control) of the resources, have they been recognised where there is sufficient evidence that meeting such conditions is within the charitable NDPB's control and that the conditions will be met? Note: where uncertainty exists as to whether the recipient charitable NDPB SORP 105 can meet conditions within its control, the incoming resource should not be recognised but deferred as a liability until certainty exists that the conditions imposed can be met. C3.5 Have incoming resources which are subject to donor imposed conditions SORP 108 that specify a future time period in which the expenditure of resources can take place, been deferred and recognised as a liability ? Note: such incoming resources should be deferred and recognised as a SORP 108 liability until the accounting period in which the charitable NDPB is allowed by the condition to expend the resource. Legacies C3.6 Have legacies been included in the SOFA as soon as the charitable NDPB SORP 123 and 124 has enough evidence to confirm entitlement to it? Note: legacies which are not immediately payable should not be treated as SORP 123 and 125 receivable until the conditions associated with payment have been fulfilled (e.g. the death of a life tenant). C3.7 Where the charitable NDPB receives a payment on account of its interest in SORP 126 an estate or a letter advising that such a payment will be made, has the payment or intended payment been treated as receivable? C3.8 Where a payment is received or notified as receivable after the accounting SORP 127 year end, but it is clear that it had been agreed by the personal representatives prior to the year end, has it been accrued in the SOFA and balance sheet? C3.9 Where the charitable NDPB has been notified of material legacies that have SORP 128 not been included in the SOFA because the conditions for recognition have not been met, have the following been disclosed in the notes: (a) this fact and an estimate, where possible, of the amounts receivable? (b) an indication of the nature of any material assets bequeathed to the charitable NDPB but subject to a life tenancy interest held by a third party? (c) where material, the accounting policies for the accounting treatments adopted for pecuniary and residuary legacies and legacies subject to a life interest held by another party? Gifts in kind C3.10 Have assets given and held as stock for distribution by the charitable NDPB SORP 129 (a) been recognised as incoming resources for the year within “voluntary income” only where distributed with an equivalent amount being included as resources expended under the appropriate category of the SOFA to reflect its distribution? C3.11 Have assets given for use by the charitable NDPB (e.g. property for its own SORP 129 (b) occupation) been recognised as incoming resources, and within the relevant fixed asset category of the balance sheet when receivable? C3.12 Where a gift has been made in kind but on trust for conversion into cash and SORP 129 (c) subsequent application by the charitable NDPB, has the incoming resource been recognised in the accounting period when receivable and, where material, an adjustment made to the original valuation upon subsequent realisation of the gift? Note: in certain cases this will not be practicable and the incoming SORP 129 (c) resources should be included in the accounting period in which the gift is sold - e.g. second-hand goods donated for resale, which, whilst regarded as a donation in legal terms, is in economic terms similar to trading and should be included within “activities for generating funds”. C3.13 In all cases, has a reasonable estimate of the gross value to the charitable SORP 130 NDPB or the amount actually realised, as in the case of second-hand goods donated for resale, been used as the amount at which gifts in kind have been included in the SOFA? C3.14 Has the basis of valuation of all gifts in kind been disclosed in the accounting SORP 131 policies? C3.15 Where assets remain undistributed at the year end, has a general SORP 132 description of the items involved and an estimate of their value been given in a note to the financial statements? Donated services and facilities C3.16 Where the charitable NDPB has received assistance in the form of donated SORP 133 facilities, beneficial loan arrangements or donated services, have these been included in the SOFA where the benefit to the charitable NDPB is reasonably quantifiable and measurable? Note: the value placed on these resources is the estimated value to the SORP 133 charitable NDPB of the service or facility received, i.e. the price the charitable NDPB estimates it would pay in the open market for a service or facility of equivalent utility to the charitable NDPB. C3.17 Have services and facilities usually provided by an individual or entity as part SORP 134 of their trade or profession for a fee, been recognised as donated services and facilities in the financial statements? C3.18 Has the contribution of volunteers been excluded from the SOFA? SORP 134 Note: the contribution of volunteers is excluded because the value of their SORP 134 IS 2 6.1 - 6.4 contribution cannot be reasonably quantified in financial terms. This issue is further discussed in SORP Information Sheet 2 section 6. C3.19 Have commercial discounts been excluded from incoming resources except SORP 134 where they clearly represent a donation? C3.20 Where donated services or facilities have been recognised, has an SORP 135 equivalent amount been included as expenditure under the appropriate heading in the SOFA? C3.21 Has an analysis of donated services or facilities included in the SOFA, SORP 136 separately and clearly identifying the different major items as appropriate (e.g. seconded staff, loaned assets), been given in the notes to the financial statements? C3.22 Has the basis of valuation used been included in the accounting policy SORP 136 notes? C3.23 Where donated services are received but not included in the SOFA (e.g. SORP 136 volunteers), has this been disclosed in the Trustees‟ Annual Report where this information is necessary for the reader to gain a better understanding of the charitable NDPB‟s activities (see also B1.4 (h))? C4 ACTIVITIES FOR GENERATING FUNDS C4.1 Has the following been included in activities for generating funds: (a) fundraising events such as jumble sales, firework displays and SORP 137 (a) concerts (which are legally considered to be trading activities)? (b) those sponsorships and social lotteries which cannot be considered SORP 137 (b) as pure donations? (c) shop income from selling donated goods and bought in goods? SORP 137 (c) (d) provision of goods and services other than for the benefit of the SORP 137 (d) charitable NDPB‟s beneficiaries? (e) letting and licensing arrangements of property held primarily for SORP 137 (e) functional use by the charitable NDPB but temporarily surplus to operational requirements? C4.2 Have the aggregate rentals receivable in the year from leases and hire SSAP 21 60 (b) purchase contracts been disclosed, analysed between finance leases and operating leases? Note: this will only apply where the charitable NDPB is a lessor of an investment property - see IQ 10. C5 INVESTMENT INCOME C5.1 Where the charitable NDPB has subsidiary undertakings, have the following been separately recognised and appropriately described under investment income in the SOFA: (a) payments to the charitable NDPB by its subsidiary undertakings and SORP 141 (a) all dividend entitlements from them (other than amounts receivable by the charitable NDPB for the provision of goods and services to subsidiaries)? SORP 141 (c) (b) gift aid payments from subsidiary undertakings (or, where not material, in the notes to the accounts)? C5.2 Where a subsidiary undertaking has made a gift aid payment, and a liability SORP 141 (b) and App 2 "FRS 21" for the gift aid payment existed at the year end, has the amount of the liability been adjusted where calculations subsequent to the year end provide greater accuracy? C5.3 Has the gross investment income arising from each of the following been shown in the notes to the financial statements: (a) investment properties? SORP 142 and 303 (a) (b) investments listed on a recognised stock exchange or ones valued by SORP 142 and 303 (b) reference to such investments (e.g. unit trusts and common investment funds)? (c) investments in subsidiary or associated undertakings or in companies SORP 142 and 303 (c) which are connected persons? (d) other unlisted securities? SORP 142 and 303 (d) (e) cash and settlements pending, held as part of the investment SORP 142 and 303 (e) portfolio? (f) any other investments? SORP 142 and 303 (f) C6 INCOMING RESOURCES FROM CHARITABLE ACTIVITIES C6.1 Has an analysis of incoming resources from charitable activities been given SORP 146 in the notes to the financial statements, to supplement the analysis on the face of the SOFA? Note: the analysis should be sufficiently detailed so that the reader of the SORP 146 accounts understands the main activities carried out by the charitable NDPB and the main components of the gross incoming resources receivable from each material charitable activity. As far as possible, incoming resources should be analysed using the same analysis categories as used for resources expended on charitable activities. C6.2 Has the following been included in incoming resources from charitable SORP 143 activities: (a) the sale of goods or services as part of the direct charitable activities SORP 145 (a) of the charitable NDPB ? Note: this is known as primary purpose trading. SORP 145 (a) (b) the sale of goods or services made or provided by the beneficiaries of SORP 145 (b) the charitable NDPB? (c) the letting of non-investment property in furtherance of the charitable SORP 145 (c) NDPB‟s objects? (d) contractual payments from government or public authorities where SORP 145 (d) these are received in the normal course of trading under (a) to (c) (e.g. fees for respite care)? (e) grants specifically for the provision of goods and services to be SORP 145 (e) provided as part of charitable activities or services to beneficiaries? Note: the treatment of restricted grants is discussed in SORP IS 1 3.1 - 3.4 Information Sheet 1 section 3. (f) ancillary trades connected to a primary purpose in (a) to (e)? SORP 145 (f) C6.3 Have grants which are for core funding or do not have particular service SORP 144 requirements or are in response to an appeal been excluded from incoming resources from charitable activities (see C3.2)? Note: such grants should be included in the section for voluntary income. SORP 144 IS 1 3.1 - 3.4 The treatment of restricted grants is discussed in SORP Information Sheet 1 section 3. C7 OTHER INCOMING RESOURCES C7.1 Has income which the charitable NDPB has not been able to analyse within SORP 147 the main incoming resource categories been disclosed as other incoming resources? Note: this will be a minority of resources and most charities will not need to SORP 147 use this category. Examples of items that fall within this category include a gain on disposal of a tangible fixed asset held for the charitable NDPB‟s own use and a gain on the disposal of a programme related investment. C7.2 Where barter transactions for advertising have been included in incoming FReM 11.2.2 UITF 26 12 resources, has the total amount that has been included been disclosed in a note to the financial statements? C8 EXPENDITURE AND COSTS Recognition of resources expended C8.1 Has expenditure been recognised as soon as there is a legal or constructive SORP 148 and 155 FRS 5 20 and 18 obligation committing the charitable NDPB to the expenditure as described in FRS 12 14 FRS 5 and FRS 12? Note: a constructive obligation arises under FRS12 where events have SORP 155 created a valid expectation in other parties that the charitable NDPB will discharge its obligations. Because an obligation always involves a commitment to another party, it follows that a funding decision by the charitable NDPB's trustees does not give rise to a constructive obligation at the balance sheet date unless the decision has been communicated before the balance sheet date to those affected in a sufficiently specific manner to raise a valid expectation in them that the charitable NDPB will discharge its responsibilities. C8.2 Where the charitable NDPB enters into a contract for the supply of goods or SORP 150 services, has expenditure been recognised once the supplier of the goods or services has performed their part of the contract? C8.3 Where a liability is not accrued, because conditions have not been met, has SORP 161 such a commitment been treated as a contingent liability? Note: SORP 150 to 160 provides detailed guidance and examples of SORP 150-160 recognition of contractual arrangements, grants payable and constructive obligations. Auditors are advised to refer to this guidance in their consideration as to whether or not a liability exists at the balance sheet date. C8.4 Where later events make the recognition of a liability no longer appropriate, SORP 163 has the liability been cancelled by credit against the relevant expenditure heading in the SOFA? Note: the credit should mirror the treatment originally used to recognise the SORP 163 expenditure for the liability and should be disclosed separately. Support costs Note (1): support costs are costs incurred that, whilst necessary to deliver SORP 164, 165 an activity, do not themselves produce or constitute the output of the charitable activity. Similarly, costs will be incurred in supporting income generation activities such as fundraising, and in supporting the governance of the charitable NDPB. Support costs do not, in themselves, constitute an activity, instead they enable output-creating activities to be undertaken. Support costs are therefore allocated to the relevant activity cost category they support. Note (2): interest and other finance costs arising from borrowing should be IS 1 6.1 - 6.2 treated as support costs. C8.5 Have central or regional office functions such as general management, SORP 164 payroll administration, budgeting and accounting, information technology, human resources and financing been included in support costs? C8.6 Have support costs been allocated to the relevant activity cost category so SORP 165 that the expenditure on the activities disclosed in the SOFA is the whole cost of performing that activity? C8.7 Have details of the total support costs incurred and of material items or SORP 166 categories of expenditure included within support costs been given in the notes to the financial statements? C8.8 Where support costs are material, has an explanation been provided in the SORP 167 notes of how these costs have been allocated to each of the activity cost categories disclosed in the SOFA or the supporting notes to the financial statements? Note: the explanation may include percentages or amounts allocated, SORP 167 details of the methods of apportionment used or a table showing the detailed allocations. C8.9 Where appropriate, has expenditure been allocated directly to an activity SORP 169 (a) cost category? C8.10 Have items of expenditure which contribute directly to the output of more SORP 169 (b) than one activity cost category been apportioned on a reasonable, justifiable and consistent basis? C8.11 Have depreciation, amortisation, impairment or losses on disposal of fixed SORP 169 (c) assets been attributed in accordance with the same principles as above (C8.9 and C8.10)? C8.12 Have support costs which may not be attributable to single activity but SORP 169 (d) provide the organisational infrastructure that enables output producing activities to take place, been apportioned on a reasonable, justifiable and consistent basis to the activity cost categories being supported? C8.13 Have bases for apportionment appropriate to the cost concerned and to the SORP 171 charitable NDPB‟s particular circumstances, and which enable the accounts to give a true and fair view, been adopted by the charitable NDPB? C8.14 Has the basis adopted for apportionment been consistently applied across SORP 171 accounting periods? C8.15 Has a distinction been drawn between publicity or information costs involved SORP 172 in raising the profile of the charitable NDPB which is associated with fundraising (costs of generating funds), and publicity or information that is provided in an educational manner in furtherance of the charitable NDPB‟s objectives (charitable expenditure)? C8.16 Has only publicity or information supplied for educational purposes been SORP 173 treated as charitable expenditure? Note: other publicity and information costs provided in conjunction with a SORP 173 fundraising activity should be regarded as targeted at potential donors and therefore relating wholly to the fundraising activity. C8.17 Has the policy adopted for the apportionment of costs between activities and SORP 175 any estimation technique(s) used to calculate their apportionment been explained in the accounting policy notes? C8.18 Where any fundraising activity is identified as meeting the criteria of a multi- SORP 176 purpose activity and part of the costs of the multi-purpose activity are allocated to charitable activities, is the policy for the identification of such multi-purpose costs explained in the accounting policy notes together with the basis on which any allocation to charitable activities is made? C9 RESOURCES EXPENDED C9.1 Have resources expended been analysed on the SOFA between: (a) costs of generating funds? SORP 177 (a) (b) costs of charitable expenditure? SORP 177 (b) (c) governance costs? SORP 177 (c) C9.2 Has an analysis of the sub-activities, services, programmes, projects or other SORP 177 initiatives that contribute to a particular activity category been included in the SOFA or the notes to the financial statements? C10 COSTS OF GENERATING FUNDS C10.1 Have the following been included in the costs of generating funds: (a) costs of generating voluntary income? SORP 178 (a) (b) costs of fundraising trading, including cost of goods sold and other SORP 178 (b) associated costs? (c) costs of managing investments for both income generation and SORP 178 (c) capital maintenance? C10.2 Have the following been excluded from the costs of generating funds: (a) costs associated with delivering or supporting the provision of goods SORP 179 (a) and services in the furtherance of the charitable NDPB‟s objects? (b) costs of any subsequent negotiation, monitoring or reporting relating SORP 179 (b) to the provision of goods or services under the terms of a grant, contract or performance-related grant? Note: interest and other finance costs arising from borrowing should be IS 1 6.1 - 6.2 treated as support costs - see C8.5 - 8.18. Costs of generating voluntary income C10.3 Where the costs of generating voluntary income are material, have details of SORP 183 the types of activity on which the costs were expended been shown in the notes to the financial statements? C10.4 As far as possible, has the detailed analysis of voluntary incoming resources SORP 183 been matched by the analysis of the costs of generating voluntary income (see C3.1)? C10.5 Have exceptional costs that have arisen in the context of generating SORP 184 voluntary income been included as an exceptional item within the relevant activity cost category ? Note: for further guidance on the disclosure of exceptional items, see section C14. C10.6 Have the following been included in the costs of generating voluntary income: (a) fundraising costs, including agents‟ costs? SORP 180 (b) start-up costs of a new fundraising activity? SORP 181 (a) Note: in most cases, it will be inappropriate to carry forward start-up SORP 181 (a) and App 2 "UITF 24" costs as prepayments or deferred expenditure as the future economic benefits that may be derived are usually not sufficiently certain. (c) data capture costs of internally developed databases? SORP 181 (b) Note: these costs may only be capitalised where future benefit can be SORP 181 (b) demonstrated and the resulting database has a readily ascertainable value. C10.7 Where start-up costs of a new fundraising activity are material in the context SORP 182 of the overall fundraising activity because of their exceptional size or incidence, has separate disclosure to explain performance been made? Fundraising trading: cost of goods sold and other costs C10.8 Where the costs associated with fundraising trading are material, have SORP 186 details been given in the notes to the financial statements to distinguish the cost of separate trading activities in a way that matches the analysis of income? C10.9 Have the following been included in fundraising trading costs: (a) cost of goods sold or services provided? SORP 185 (a) (b) other costs related to the trade (e.g. staff costs, premises costs and SORP 185 (b) other costs incurred in the activity including allocated support costs)? (c) costs related to the licensing of a logo? SORP 185 (c) (d) in consolidated accounts, costs incurred by both the charitable NDPB SORP 185 and any subsidiaries or other entities consolidated on a line-by-line basis? Note: fundraising trading costs should include all costs that are incurred by SORP 185 trading for a fundraising purpose in either donated or bought-in goods or in providing non-charitable services to generate income. Investment management costs C10.10 Where investment management fees are deducted from investment income SORP 187 by investment managers, has the gross investment income before fees been shown as investment income, and the fees reported under investment management costs? Note: where it is not practicable to ascertain with reasonable accuracy the IS 1 5.1 - 5.3 actual or notional apportionment of investment management costs charged to individual participants in collective investment schemes or common investment funds, the investment income received should be reported without adjustment. C10.11 Have investment management costs associated with endowment fund SORP 187 investments been charged to the endowment fund in the SOFA? C11 CHARITABLE ACTIVITIES C11.1 Have all the resources applied by the charitable NDPB in undertaking its SORP 188 Reg Sch 2 1 (1) (q) work to meet its charitable objectives been included in resources expended on charitable activities? Note: resources expended on charitable activities are those costs that are SORP 188 not the costs of raising the funds to finance these activities or governance costs. Charitable activities are all the resources expended by the charity in the delivery of goods and services, including its programme and project work, that is directed at the achievement of its charitable aims and objectives. Such costs include the direct costs of the charitable activities, together with those support costs incurred that enable these activities to be undertaken. C11.2 Where charities carry out their activities through a combination of direct SORP 189 Reg Sch 2 1 (1) (q) service provision and grant funding to third parties, have both the direct costs and the costs incurred via grant making been included within the total cost for this activity? C11.3 Where incoming resources are received either under contract or by a SORP 190 Reg Sch 2 1 (1) (q) restricted grant to provide a specified service, has further analysis of charitable activities expenditure been provided in the notes to the financial statements, to demonstrate the link between the incoming resource and the charitable activity that it funds? Note: this is not a mandatory disclosure. SORP 190 C11.4 Have the resources expended on charitable activities been analysed on the SORP 191 Reg Sch 2 1 (1) (q) face of the SOFA or in a prominent note to the financial statements? Note: the analysis resources expended on charitable activities should SORP 191 provide an understanding of the nature of the activities undertaken and the resources expended on their provision. C11.5 Have the following been disclosed in a note to the financial statements: (a) the amount of support costs allocated to charitable activities? SORP 192 Reg Sch 2 1 (1) (q) (b) where appropriate, the amount of grant making expenditure, and an SORP 193 Reg Sch 2 1 (1) (q) explanation of the activity funded? (c) the cost of each charitable activity undertaken by the charity (i.e. the SORP 194, 191, and Table 5 Reg Sch 2 1 (1) (q) main services provided or the material programmes or projects undertaken), with totals reconciling to the SoFA and other notes as appropriate? Note: all the requirements of SORP 191 - 194 (an analysis of charitable SORP 194 and Table 5 activities by type of expenditure) may be presented simply as a prominent note to the financial statements along the lines of SORP Table 5. Grant making C11.6 Where grant making costs are material, has an analysis and explanation of Reg Sch 2 1 (1) (o) SORP 200 (b) the charitable NDPB's grant making been given in the notes that: (a) analyses the total amount of grants between grants to individuals and SORP 203 (a) and Table 6 grants to institutions? Note (1): a grant to an individual is one made for the direct benefit of the SORP 199 individual who receives it. All other grants should be regarded as institutional (e.g. a grant made to an individual to carry out a research project should be regarded as a grant to the institution with which the individual is connected rather than as a grant to the individual). Note (2): details of the recipients of grants to individuals need not be SORP 200 (a) given. (b) analyses the total amount of grants paid by nature or type of activity SORP 203 (b) and Table 6 or project being supported? (c) analyses the amounts paid by public and private sector recipients? FReM 7.4.39 (d) reconciles the amounts in (a) and (b) with the total of grants payable? SORP 203 (e) provides a reasonable understanding of the nature of the activities or SORP 198, 201 and 204 projects that are being funded, including how the grants made relate to the objects of the charitable NDPB and the policy adopted by the trustees in pursuing these objects? Note (1): further or alternative levels of analysis (e.g. geographical analysis) SORP 204 may be given, as and where appropriate. Note (2): further analysis and explanation of the purposes for which grants SORP 205 were made may be given as part of the Trustees‟ Annual Report or by means of a separate publication. But sufficient detail must be given in the notes to the financial statements as is needed to provide a true and fair view. C11.7 Has the amount of support costs associated with grant making activities SORP 202 been disclosed in the notes to the financial statements? C11.8 Have the following been included in support costs related to grant making: (a) costs incurred before the grants are made (pre-grant costs) as part of SORP 196 (a) the decision making process? (b) post-grant costs (e.g. monitoring of grants)? SORP 196 (b) (c) costs of any central or regional office functions (e.g. general SORP 196 (c) management, payroll administration, budgeting and accounting, information technology, human resources, and financing)? C11.9 Where the charitable NDPB has made grants to particular institutions that SORP 206 and 198 are material in the context of grant making, have the following details of a sufficient number of institutional grants been disclosed to provide a reasonable understanding of the type and range of institutions it has supported: (a) the name of the institution? SORP 207 (b) the total value of grants made to the institution in the accounting SORP 207 year? (c) where grants have been made to a particular institution to undertake SORP 207 different activities or projects, the total value of the grants made for each activity or purpose? Note: grants made to different officers or departments of a particular SORP 207 university for different projects should be treated as having been made to the same institution. Note: this information may be provided either in the notes to the accounts, SORP 206 or as part of the Trustees' Annual Report, or by means of a separate publication. C11.10 Where the analysis of institutional grants is contained in a separate SORP 206 publication, has the publication been identified and how copies of it can be obtained been stated in the notes to the financial statements? Note: this publication should be made available by the charitable NDPB to SORP 206 the public on request C11.11 Where disclosure of the details of an institutional grant may seriously SORP 208 prejudice the furtherance of the purposes either of the recipient institution or the charitable NDPB itself, so that details of grants to that institution have not been disclosed, has the following information been disclosed in the notes to the financial statements: (a) the total number, value and general purpose of the grants SORP 209 (a) concerned? (b) whether or not full details of any grants not disclosed and a full SORP 209 (b) and (c) explanation of the reasons why those details have not been disclosed in the accounts have been given to the charitable NDPB‟s regulatory body? C12 GOVERNANCE COSTS C12.1 Has the nature of costs allocated to the governance category been SORP 212 explained in the accounting policy notes to the financial statements? C12.2 Where it provides useful information, has an analysis of the main items of SORP 212 expenditure included within the governance category been provided in the notes to the financial statements? C12.3 Have the following been included in governance costs: SORP 211 (a) direct costs (e.g. internal and external audit, legal advice for trustees, and costs associated with constitutional and statutory requirements, such as the cost of trustee meetings and preparing statutory accounts)? (b) where material, an apportionment of shared and indirect costs involved in supporting the governance activities? Note: governance costs include the costs of governance arrangements SORP 210 which relate to the general running of the charitable NDPB as opposed to the direct management functions inherent in generating funds, service delivery and programme or project work. These activities provide the governance infrastructure which allows the charitable NDPB to operate and to generate the information required for public accountability, and include the strategic planning processes that contribute to future development of the charitable NDPB. C13 OTHER RESOURCES EXPENDED C13.1 Has the payment of any resources which the charitable NDPB has not been SORP 213 able to analyse within the main resources expended categories been included in other resources expended? Note: this category should not be used for support costs which can be SORP 213 allocated to other activity costs. C14 EXCEPTIONAL ITEMS C14.1 Has the amount of each item exceptional by size or incidence (except those SORP 184 FRS 3 19 listed in C14.2) been disclosed, either in a note to the financial statements, SI 2008/410 89 (3) or, where that degree of prominence is necessary to give a true and fair view, on the face of the SOFA (within the appropriate category)? DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref SECTION E: BALANCE SHEET AND RELATED NOTES #REF! E1 GENERAL E1.1 Have all balance sheet items been disclosed under the headings and in the SORP 246 and Table 7 order specified in CA 2006 as amended by the SORP, the FReM and the charitable NDPB‟s accounts direction? E1.2 Has the disclosure of any transaction whether or not it results in assets or FRS 5.30 liabilities being recognised or ceasing to be recognised been sufficient to enable the user of the financial statements to understand its commercial effect? E1.3 Where a transaction has resulted in assets and liabilities being recognised FRS 5.31 whose nature differs from that of items usually included under the relevant balance sheet headings, have the differences been explained? E1.4 Where there has been, or needs to be, linked presentation of assets and FRS 5.26 - 5.28 liabilities, have all the relevant disclosure requirements in FRS 5 been complied with? E1.5 Has, as a minimum, the following been separately and clearly identified in SORP 247 the balance sheet: (a) unrestricted income funds? (b) restricted income funds? (c) endowment funds? Note (1): the split between permanent and expendable endowments, and SORP 247 between general and designated unrestricted funds, may be shown on the balance sheet or in the notes. The order in which the categories of funds are presented within the balance sheet (Section E of Table 7) can be varied according to presentational preference. Note (2): the charitable NDPB may choose to adopt a columnar SORP 248 presentation of its assets, liabilities and funds in the balance sheet. Such a presentation shows the asset and liability categories analysed in columns between each fund type in a similar way to the SOFA. Although not mandatory, this approach ensures the required analysis of assets and liabilities by category of fund is presented. Where the charitable NDPB does not have funds of a particular category, the column related to that category of fund should be omitted. E1.6 Where the balance sheet is not presented in columnar format, have the SORP 248 assets and liabilities (e.g. investments, fixed assets, net current assets) representing each category of fund been summarised and analysed between those funds in the notes to the financial statements? E1.7 Does the balance sheet and associated notes show assets, liabilities and SORP 246 Table 7 fund categories under the following headings? E1.7.1 1 A Fixed assets E1.7.2 (a) Intangible assets A1 E1.7.3 (b) Tangible assets A2 E1.7.4 (c) Heritage assets A3 E1.7.5 (d) Investments: A4 E1.7.6 (i) Investments A4a E1.7.7 (ii) Programme related investments A4b E1.7.8 A Total fixed assets E1.7.9 2 Current assets B E1.7.10 (a) Stocks and work-in-progress B1 E1.7.11 (b) Debtors B2 E1.7.12 (c) Investments B3 E1.7.13 (d) Cash at bank and in hand B4 E1.7.14 B Total current assets E1.7.15 3 Liabilities C E1.7.16 (a) Creditors: amounts falling due within one year C1 E1.7.17 C Net current assets or liabilities E1.7.18 D Total assets less current liabilities E1.7.19 4 Creditors: amounts falling due after more than one year C2 E1.7.20 5 Provisions for liabilities and charges C3 E1.7.21 E Net asset or liabilities excluding pension asset or liability E1.7.22 6 Defined benefit pension scheme asset or liability D E1.7.23 F Net assets or liabilities including pension asset or liability E1.7.24 7 E The funds of the charitable NDPB E1.7.25 (a) Endowment funds E1 E1.7.26 (b) Restricted income funds E2 E1.7.27 (c) Unrestricted income funds E3 E1.7.28 (i) Share capital E3a E1.7.29 (ii) Unrestricted income funds E3b E1.7.30 (iii) Revaluation reserve E3c E1.7.31 G Unrestricted income funds excluding pension asset/liability E1.7.32 (d) Pension reserve E3d E1.7.33 H Total unrestricted funds E1.7.34 I Total charitable NDPB funds E2 INTANGIBLE FIXED ASSETS Note: under FRS 10, the only intangibles that may be capitalised are Link to "Initial questions" sheet purchased goodwill or intangible assets, or internally generated intangibles that have a readily ascertainable market value. If the charitable NDPB does have capitalisable intangible assets, note that the FReM requires a policy of capitalisation, overriding the choice of capitalisation or write off in SSAP 13 and FRS 10, and complete Supplement E2. See question 4 of "Initial Questions" sheet to obtain this supplement. E3 TANGIBLE FIXED ASSETS Note (1): the following section does not apply to heritage assets (E4) or investment assets (E5). Note (2): FRS 15 applies, subject to the following: Recognition and Measurement (a) all tangible fixed assets should be carried at valuation so as to give a FReM 2.1.4 true and fair view of the value of those assets at the balance sheet date: there is no option as given in FRS 15 to measure at cost, or to value only certain classes of assets. (b) tangible fixed assets should be valued at the lower of replacement FReM 2008/09 5.2.6 c) cost and recoverable amount (which is the higher of net realisable value or value in use). Where the charitable NDPB cannot measure value in use in terms of income, value in use should be assumed to be at least equal to the cost of replacing the service potential provided by the asset (subject to any impairment of that service potential). Not required by FReM 2009-10, but best practice per FReM 2008-09 (c) gains and losses arising on disposal, revaluation or impairment of SORP 217 fixed assets - whether held for the charitable NDPB‟s own use or for investment purposes - should form part of the particular fund in which the investment or other asset concerned is or was held. See C17.4 - C17.7. Valuations - Property (d) charitable NDPBs should value their estates using the most FReM 2008/09 5.2.7 a) appropriate valuation methodology available in FRS 15. Such methods might include: (i) the approach set out in FRS 15.42 to 15.62; (ii) a quinquennial valuation supplemented by annual indexation and no interim professional valuation; (iii) annual valuations; or (iv) a rolling programme of valuations of properties (whether specialised or non-specialised). Not required by FReM 2009-10, but best practice per FReM 2008-09 (e) the valuers should determine, using the RICS „Red Book‟ and FReM 2008/09 5.2.7 b) following discussions with the charitable NDPB, the most appropriate valuation methodology. Not required by FReM 2009-10, but best practice per FReM 2008-09 (f) where a valuer determines that a cost approach (otherwise known as FReM 2008/09 5.2.7 b) depreciated replacement cost (DRC)) is the most appropriate, charitable NDPBs and their valuers should have regard to the RICS Valuation Information Paper No. 10 and the more detailed guidance available on the FReM website. Not required by FReM 2009-10, but best practice per FReM 2008-09 (g) where DRC is used: FReM 2008/09 5.2.7 c) FReM 2008/09 5.2.7 d) (i) charitable NDPBs should normally value a modern equivalent FReM 2008/09 5.2.7 e) asset in line with the Red Book. The charitable NDPB should discuss with the relevant authority (through sponsoring bodies where appropriate) any plans to value a reproduction of the existing asset and determine whether such an approach is appropriate to the charitable NDPB‟s circumstances; (ii) charitable NDPBs should use the „instant build‟ approach; (iii) the choice of whether to value an alternative site will normally hinge on the locational requirements of the service that is being provided. Not required by FReM 2009-10, but best practice per FReM 2008-09 (h) the cost of enhancements to existing assets should be capitalised FReM 2008/09 5.2.7 f) during the construction phase as an asset under construction. Not required by FReM 2009-10, but best practice per FReM 2008-09 (i) at the first valuation after the asset is brought into use, any write down FReM 2008/09 5.2.7 f) SORP 218 (a) of cost should be treated as an impairment (i.e. additional depreciation of the impaired asset) and included appropriately in the resources expended section of the SOFA. Not required by FReM 2009-10, but best practice per FReM 2008-09 Valuations - Non-Property (j) charitable NDPBs may adopt a depreciated historical cost basis as a FReM 2008/09 5.2.7 h) proxy for current valuations for assets that have short useful economic lives (UELs) or low values (or both) - but the UEL must be a realistic reflection of the life of the asset and the depreciation method used must provide a realistic reflection of the consumption of that asset class. To qualify as a "proxy", the NAO considers that the depreciated historical cost value should not be materially different from the current valuation. Not required by FReM 2009-10, but best practice per FReM 2008-09 (k) where depreciated historical cost is not used, assets should be FReM 2008/09 5.2.7 i) carried at current value, and valued using the most appropriate valuation methodology available in FRS 15. Not required by FReM 2009-10, but best practice per FReM 2008-09 FReM 2008/09 5.2.7 More detailed guidance on valuations is available In "Guidance on Asset Valuation" on the FReM website. Not required by FReM 2009- 10, but best practice per FReM 2008-09 E3.1 Have tangible fixed assets been analysed, at a minimum, according to the SORP 273 following categories (where material): SORP 273 (a) (a) freehold interest in land and buildings excluding dwellings? (b) leasehold and other interests in land and buildings excluding SORP 273 (b) dwellings? SORP 273 (a) (c) freehold interest in dwellings? SORP 273 (b) (d) leasehold and other interests in dwellings? (e) infrastructure assets? SORP 273 (c) (f) transport equipment? SORP 273 (c) (g) plant and machinery? (h) information technology? SORP 273 (d) (i) furniture and fittings? (j) antiques and works of art? SORP 273 (e) (k) payments on account and assets under construction? (l) cultivated assets? Note: these headings may be split or other narrower classes adopted, SORP 273 within reason, that meet the definition of a class of tangible fixed assets and are appropriate to the charitable NDPB's operations. E3.2 In addition to land and buildings (including dwellings), have owned and FReM 5.4.41 leased assets been separately and clearly identified under the other headings listed in E3.1? E3.3 Have tangible fixed assets been initially included at their cost of acquisition, SORP 255 (a) including costs that are directly attributable to bringing the assets into working condition for their intended use? Note: finance costs that are directly attributable to the construction of FReM 2008/09 5.2.6 d) tangible fixed assets should not be capitalised. Not required by FReM 2009- 10, but best practice per FReM 2008-09 E3.4 Where a functional fixed asset is acquired in full or in part from the SORP 255 (b) proceeds of a grant, is the acquisition included at full cost (or, in the case of a joint arrangement, at the gross value of the charitable NDPB‟s share in the asset) without netting off the grant proceeds? E3.5 Where functional fixed assets have been donated, have they be included in SORP 255 (c) the balance sheet at their current value at the date of the gift and also included in the SOFA as an incoming resource? E3.6 Where functional fixed assets are capitalised some time after being SORP 255 (d) acquired (e.g. as a result of a change in accounting policy), have they been included at original cost or at the value at which the gift was included in the SOFA, less an amount for depreciation? Note: where neither of these amounts is ascertainable, a reasonable SORP 255 (d) estimate of the asset‟s cost or current value to the charitable NDPB should be used. Such a valuation should be regarded as the asset‟s initial carrying amount and not regarded as a revaluation. E3.7 Where land and buildings are held for both functional and investment SORP 257 (a) purposes, but primarily used for charitable purposes, have they been included in tangible fixed assets? E3.8 Where land and buildings are held for both functional and investment SORP 257 (b) purposes, but primarily used for investment purposes, have they been included as investment assets? E3.9 Have land and buildings, which contain clearly distinguishable parts which SORP 257 (c) are held for both functional and investment purposes, been apportioned and analysed in the balance sheet between tangible fixed assets and investment assets? E3.10 Has depreciation been recognised as an annual depreciation charge in the SORP 258 SOFA and shown in the balance sheet as accumulated depreciation deducted from the value of the relevant fixed assets? E3.11 Has depreciation been charged on all tangible fixed assets held for use by SORP 259 the charitable NDPB and included on the balance sheet (excluding those which fall under E3.11)? E3.12 Has depreciation not been charged where tangible fixed assets meet the following criteria: (a) the asset is freehold land which is considered to have an indefinitely SORP 259 (a) long useful life? (b) both the depreciation charge and the accumulated depreciation are not material because: (i) the asset has a very long useful life? SORP 259 (b) (i) (ii) the estimated residual value (based on prices at the time of SORP 259 (b) (ii) acquisition or subsequent revaluation) of the asset is not materially different from the carrying amount of the asset? Note: where depreciation is not charged because of immateriality, the FRS 15.89 (a) asset should be subject to an annual impairment review. E3.13 Have the useful economic lives and residual values of assets been SORP 260 reviewed at the end of each accounting period? E3.14 Where there is a material change in the useful economic life or residual SORP 260 value of an asset, has the asset been depreciated over its remaining useful life? E3.15 Where a fixed asset for charitable NDPB use comprises two or more major SORP 261 FRS 15.83 components with substantially different useful economic lives, has each component been accounted for separately and depreciated over its individual useful life? E3.16 Has the following information been disclosed separately in the notes for SORP 274 and Table 8 FRS 15.100 each class of tangible fixed assets: (a) the cost or revalued amount at the beginning of the period? SI 2008/410 § 62 FRS 15.100 (e) (b) additions? SI 2008/410 § 62 FRS 15.100 (g) (c) disposals? SI 2008/410 § 62 FRS 15.100 (g) (d) revaluations? SI 2008/410 § 62 FRS 15.100 (g) (e) transfers? SI 2008/410 § 62 FRS 15.100 (g) (f) the cost or revalued amount at the balance sheet date? SI 2008/410 § 62 FRS 15.100 (e) (g) accumulated depreciation and impairment provisions at the SI 2008/410 § 62 FRS 15.100 (f) beginning of the period? (h) adjustment to accumulated depreciation for disposals? SI 2008/410 § 62 FRS 15.100 (g) (i) adjustment to accumulated depreciation for revaluations? SI 2008/410 § 62 FRS 15.100 (g) (j) impairment charges? SI 2008/410 § 62 FRS 15.100 (g) (k) reversals of past impairment charges written back in the period? FRS 15.100 (g) (l) adjustment to accumulated depreciation for transfers? SI 2008/410 § 62 FRS 15.100 (g) (m) depreciation charge for the year? SI 2008/410 § 62 FRS 15.100 (g) (n) accumulated depreciation and impairment provisions at the balance SI 2008/410 § 62 FRS 15.100 (f) sheet date? (o) net book value at the beginning of the period? FRS 15.100 (h) (p) net book value at the balance sheet date? FRS 15.100 (h) Note: line items that are not needed in the charitable NDPB's particular SORP 274 circumstances may be omitted. E3.17 Where a change during the period in the estimate of either useful economic FRS 15.100 (d) FRS 18.55 (d) lives or residual values has a material effect, has a description of the change and quantification of the effect been disclosed? E3.18 Where the method of depreciation has been changed, has the effect of, and FRS 15.102 reasons for, the change been disclosed, where material? Revaluation E3.19 For each class of tangible fixed asset that has been revalued, has the following information been disclosed: (a) the name and qualifications of the valuer or valuer‟s organisation and SORP 277 (a) FRS 15.74 (i) a description of its nature? (b) whether the person carrying out the valuation is a member of staff or SORP 277 (a) FRS 15.74 (v) a Trustee, or external to the charitable NDPB? (c) where the valuation has been carried out by a member of RICS, a FRS 15.75 Statement of Asset Valuation Practice 1.2.2 statement that the valuation has been made in accordance with the RICS Appraisal and Valuation Manual or a named alternative? (d) the basis or bases of valuation? SORP 277 (b) FRS 15.74 (ii) (e) the date and amounts of valuations? FRS 15.74 (iii) (f) where the Trustees or Accounting Officer are not aware of any SORP 277 (e) FRS 15.74 (vi) material change in value and therefore the valuation(s) have not been updated, a statement to that effect? (g) where the valuation has not been updated, or it is not a full valuation, SORP 277 (d) FRS 15.74 (vii) the date of the previous full valuation? (h) where records are available, the historical cost less depreciation? SORP 277 (c) FRS 15.74 (iv) Note: historical cost carrying amounts need not be disclosed. This is FReM 6.2.8 unlikely to constitute a material departure from the SORP, which would itself require disclosure - see A1.7. E3.20 Where an individual tangible fixed asset is revalued, have all the assets SORP 262 FRS 15.61 within the same class been revalued? Note: in rare cases it may not be possible to obtain a reliable valuation for a FRS 15.61 particular asset and it may be excluded from the class of assets. Where this is the case, the carrying amount of the asset, and the fact that it has not been revalued, must be stated. E3.21 For revalued properties, has the following been disclosed: (a) where properties have been valued as fully-equipped operational FRS 15.74 (b) (i) entities having regard to their trading potential, a statement to that effect and the carrying amount of those properties? (b) the total amount of notional directly attributable acquisition costs (or FRS 15.74 (b) (ii) the total amount of expected selling costs deducted), included in the carrying amount, where material? (c) where the open market value (OMV) is materially different from FRS 15.53 (a) existing use value (EUV), has the OMV, and the reasons for the difference, been disclosed in notes? Note: where not impaired, non-specialised properties should be valued FRS 15.53 (a) on the basis of EUV. Land and buildings E3.22 Have land and buildings held as fixed assets been analysed between SI 2008/410 53 freeholds, long leaseholds (leases with 50+ years to run from the balance sheet date) and short leaseholds? Leases and hire purchase contracts E3.23 Have finance leases been recorded in the balance sheet as an asset, and SSAP 21.32 as an obligation to pay future rentals? E3.24 Where assets are held under finance leases, hire purchase, or on-balance SSAP 21.49 sheet PFI contracts, have the following, where not combined, been separately disclosed for each major class of asset: (a) gross amount of such assets? (b) related accumulated depreciation? (c) total depreciation charge for the period? E3.25 Where the amounts in E3.23 have been combined, have the following been SSAP 21.50 separately disclosed for each major class of asset: (a) net amount of leased assets included in the overall total? (b) depreciation allocated for the year relating to such assets? Lessors E3.26 Where the charitable NDPB is a lessor, have the following been disclosed: (a) gross amount of assets held for use in operating leases and the SSAP 21.59 related accumulated depreciation? (b) cost of assets acquired in the period for the purpose of letting under SSAP 21.60 (c) finance leases? Note: this will only apply where the charitable NDPB is a lessor of an investment property - see IQ 10. E3.27 Where a donor imposes restrictions on the use of donated assets, have FReM 6.2.23 details of restrictions been disclosed in a note to the accounts? Website development costs E3.28 Has the charitable NDPB capitalised as a tangible fixed asset the costs of UITF 29 FReM 2008/09 5.2.53 developing a website, where the following criteria have been met: • EITHER the website will directly generate sales/revenues in excess of its development and running costs; • OR for not-for-profit entities, that the primary objective of the website is to provide a means of delivery of the services fulfilling the charitable NDPB's principal objectives (e.g. the provision of educational information to beneficiaries of the charitable NDPB)? Not required by FReM 2009-10, but best practice per FReM 2008-09 Impairment FRS11 and the SORP require a review for impairment to be carried out if SORP 267 there are indications that the net book value of fixed asset(s) may not be recoverable. Indications of impairment for the charitable NDPB may include: (a) physical deterioration, change or obsolescence of the asset; SORP 269 (a) (b) social, demographic or environmental changes resulting in a SORP 269 (b) reduction in the number of beneficiaries for the charitable NDPB; (c) changes in law or regulation adversely affecting the charitable NDPB; SORP 269 (c) (d) management commitments to undertake a significant reorganisation; SORP 269 (d) (e) a major loss of key employees associated with particular activities of SORP 269 (e) the charitable NDPB; (f) operating losses on activities using fixed assets primarily to generate SORP 269 (f) incoming resources. An impairment review consists of comparison of the net book value of the SORP 267, 268 and 270 asset(s) with the recoverable amount, and an impairment will exist where the net book value is less than the recoverable amount. Recoverable amount is the higher of value in use or net realisable value. FRS11 covers calculation of value in use for income generating assets or groups of assets, using discounted cash flows. This will not normally be appropriate for charities, so the impairment review (where required) will normally consist simply of comparison of net book value to net realisable value. The specific disclosure requirements of FRS11 are almost all concerned with assumptions made in value in use calculations, and for this reason are unlikely to be applicable to charities and are not reflected in this checklist. E3.29 Where an impairment has occurred: (a) has the impairment loss been treated as additional depreciation and SORP 272 and 218 included in the SOFA in the same way as other depreciation on the same assets? (b) has the impairment loss been included within the accumulated SORP 272 depreciation? Note: cost or valuation of the asset should not be reduced. (c) has the revised carrying amount been depreciated over the SORP 272 remaining useful economic life? E4 HERITAGE ASSETS #REF! Note: FRS 15 requires that all tangible fixed assets should be capitalised in SORP 279 FReM 6.2.27 the balance sheet. In principle this includes tangible fixed assets which are of historical, artistic or scientific importance that are held to advance preservation and conservation objectives of the charitable NDPB. A Heritage asset is a tangible asset with historical, artistic, scientific, SORP 281 FReM 6.2.25 technological, geophysical or environmental qualities that is held and maintained principally for its contribution to knowledge and culture. Heritage assets are those assets that are intended to be preserved in trust for future generations because of their cultural, environmental or historical associations. They are held by the reporting entity in pursuit of its overall objectives in relation to the maintenance of the heritage. Non-operational assets are those that are held primarily for this purpose. Operational heritage assets are those that, in addition to being held for their characteristics as part of the nation‟s heritage, are also used by the reporting entity for other activities or to provide other services (the most common example being buildings). Auditors should consult the SORP Glossary (GL 32) for further guidance. All heritage assets should be accounted for in accordance of Financial FReM 6.2.26 FRS 30.26 Reporting Standard 30 - Heritage Assets. This standard should be applied in respect of accounting periods beginning on or after 1 April 2010. Earlier application is encouraged The reporting entity holding the asset should attest annually to the ongoing FReM 6.2.27 heritage credentials of its heritage assets. Heritage assets include historical buildings, archaeological sites, military and scientific equipment of historical importance, museum and gallery collections and works of art Recognition and measurement SORP 289 E4.1 Have operational heritage assets been valued in the same way as other FReM 6.2.29 assets of that general type? (buildings, for example) SORP 289 E4.2 Have assets which are of historical, scientific or artistic importance but are FReM 6.2.25 not held by the charitable NDPB for preservation or conservation purposes, been excluded from heritage assets? Note: Where assets of historical, scientific or artistic importance are held by SORP 289 FReM 6.2.25 a charity but not for preservation or conservation purposes, they cannot be (a) holds and occupies an historic building as its administrative offices or as SORP 289a part of a property investment portfolio unrelated to any preservation or (b) has in its possession works of art, or a collection of historic importance, SORP 289b or antique furnishings within its boardroom, as a store of wealth, the (c) occupies a functional property that is used to house or display a SORP 289c collection of heritage assets (unless the property itself is held for SORP 282 E4.3 Have newly purchased non-operational heritage assets initially been measured and recognised at their cost? FReM 6.2.30 E4.4 Where information is available on the cost or value of heritage assets has FRS 30.19 the entity; (i) presented this in the Balance Sheet separately from other tangible SORP 288 FReM 6.2.30 assets; FRS 30.19(i) (ii) identified separately in the Balance sheet or the notes to the accounts FReM 6.2.30 FRS 30.19(ii) those classes of heritage assets being reported at cost and those at valuation; and (iii) changes in the valuation should be recognised in the Statement of Total FReM 6.2.30 FRS 30.19(iii) Recognised Gains and Losses, except impairment losses that should be recognised in accordance with the recognition and measurement requirements of FRS 11 Impairment of fixed assets and goodwill Note: Where assets have previously been capitalised or are recently SORP 286 and 284 FReM 6.2.31 purchased, information on their cost or value will be available. Where this FRS 30.19 information is not available, and cannot be obtained at a cost commensurate with the benefits to users of the financial statements, the assets will not be recognised in the Statement of Financial Position. Examples of heritage assets for which a cost or valuation may be difficult to SORP 286 and 284 attribute include: (a) museum and gallery collections and other collections including the national archives; (b) medieval castles, archaeological sites, burial mounds, ruins, monuments and statues. E4.5 Have valuations been made by any method that is appropriate and FReM 6.2.32 relevant? FRS 30.21 E4.6 Whilst there is no requirement for valuations to be carried out or verified by FReM 6.2.33 external valuers, nor is there any prescribed minimum period between FRS 30.22 valuations, where heritage assets are reported at valuation, has the carrying amount been reviewed with sufficient frequency to ensure the valuations remain current? Depreciation and Impairment SORP 288 E4.7 Has an appropriate depreciation policy been applied? FReM 6.2.34 FRS 30.23 Note: Depreciation need not be provided on heritage assets which have SORP 288 FReM 6.2.34 indefinite lives. Heritage assets may have an indefinite useful life and a high FRS 30.23 residual value resulting in any depreciation charge being immaterial. E4.8 Has the carrying amount of an asset been reviewed where there is FReM 6.2.35 evidence of impairment? FRS 30.24 Note: for example where it has suffered physical deterioration or breakage FReM 6.2.35 or new doubts arise as to its authenticity. FRS 30.24 E4.9 Has any impairment been recognised and dealt with in accordance with the FReM 6.2.35 recognition and measurement requirements of FRS 11 Impairment of fixed FRS 30.24 assets and goodwill? Donations FRS 30.25 E4.10 Where the entity has received donations of heritage assets have these been reported in the profit and loss account at valuation? FReM 6.2.42 E4.11 Have Disclosures been provided on the nature and extent of significant FRS 30.15 donations of heritage assets? FReM 6.2.42 E4.12 Where it is not practicable to obtain a valuation of heritage assets acquired FRS 30.15 by donation, have the reasons why been stated? Disclosures E4.13 Does the entity‟s financial statements contain an indication of the nature SORP 294 (a) FReM 6.2.37a and scale of heritage assets held by the entity? FRS 30.6 E4.14 Do the financial statements set out the entity‟s policy for the acquisition, FReM 6.2.37b preservation, management and disposal of heritage assets? FRS 30.6 Note: This should include a description of the records maintained by the FReM 6.2.37b FRS 30.6 entity of its collection of heritage assets and information on the extent to which access to the assets is permitted. The information required by this paragraph may alternatively be provided in a document that is cross- referenced from the financial statements. SORP 294 (c) E4.15 Has the entity disclosed its accounting policies for holding of heritage FReM 6.2.37c assets including details of the measurement bases used. FRS 30.8 FReM 6.2.37d E4.16 For heritage assets that are not reported in the balance sheet, have the FRS 30.9 reasons why been explained with the notes to the financial statements explaining the significance and nature of those assets? Note: The disclosures relating to assets that are not reported in the balance FReM 6.2.37e FRS 30.10 sheet should aim to ensure that, when read in the context of information about capitalised assets, the financial statements provide useful and relevant information about the entity's overall holding of heritage assets. FReM 6.2.38 E4.17 Where heritage assets are reported in the balance sheet, has the following FRS 30.11 been disclosed: (i)the carrying amount of heritage assets at the beginning of the financial FReM 6.2.38(i) FRS 30.11(i) period and at the balance sheet date, including an analysis between those classes or groups of heritage assets that are reported at cost and those that are reported at valuation; and (ii)where assets are reported at valuation, sufficient information to assist in FReM 6.2.38(ii) FRS 30.11(ii) an understanding of the valuations being reported and their significance. This should include: (a)the date of the valuation; FReM 6.2.38a FRS 30.11a (b)the methods used to produce the valuation; FReM 6.2.38b FRS 30.11b (c)whether the valuation was carried out by external valuers and, where this FReM 6.2.38c FRS 30.11c is the case, the valuer's name and professional qualification, if any; and (d)any significant limitations on the valuation FReM 6.2.38d FRS 30.11d Note: An example of a limitation to be disclosed under paragraph 11(ii)(d) FReM 6.2.39 FRS 30.12 would be where an asset has a particular provenance, the effect of which is not fully captured by valuation. FReM 6.2.40 E4.18 Where Information that is available to the entity and is helpful in assessing FRS 30.13 the value of those heritage assets that are not reported in the entity‟s Statement of Financial Position, has this been be disclosed? FReM 6.2.41 E4.19 Do the financial statements contain a summary of transactions relating to FRS 30.14 heritage assets disclosing, for the accounting period and each of the #REF! previous four accounting periods the following: (a) the cost of acquisitions of heritage assets; SORP 294 (b) (i) FReM 6.2.41a FRS 30.14a (b) the value of heritage assets acquired by donation; FReM 6.2.41b FRS 30.14b (c) the carrying amount of heritage assets disposed of in the period and the SORP 294 (b) (i) FReM 6.2.41c proceeds received; and FRS 30.14c (d) any impairment recognised in the period. FReM 6.2.41d FRS 30.14d Note: This summary should show separately transactions in assets that are FReM 6.2.41 FRS 30.14 reported in the balance sheet and those that are not Note:The information may be supplemented by disclosure of other FReM 6.2.42 FRS 30.16 information, for example the sources of funding for acquisition of heritage assets, or expenditure on major restoration costs, but this is not required by FRS 30 or the FReM Note: The disclosures required by paragraphs 6.2.37 (a) to 6.2.43 & FRS FReM 6.2.44 FRS 30.17 30.6 to 30.15 may be presented in aggregate for groups or classes of heritage assets provided this aggregation does not obscure significant information. Separate disclosures should be provided for those assets reported at cost and those reported at valuation. Amounts in respect of assets that are not reported in the Statement of Financial Position should not be aggregated with amounts for assets that are recognised at cost or valuation. Have inalienable assets that do not fall within the definition of heritage SORP 291 E4.20 assets been capitalised and disclosed in the relevant categories of the balance sheet and in related notes? E4.21 Have inalienable assets been categorised to the charitable NDPB‟s SORP 292 restricted funds (often permanent endowment)? Where the valuation of previously non-capitalised assets on an existing use SORP 293 E4.22 basis may be inappropriate because of the religious, historical or cultural significance of the assets, has a statement to that effect explaining why conventional valuation techniques cannot be applied been disclosed in the notes to the financial statements? Note: abbeys, monasteries, cathedrals, historic churches and ancient SORP 293 centres of learning may not meet the heritage asset definition as the preservation of the buildings they occupy is unlikely to be the primary objective of the charitable NDPB. Such assets might nevertheless be considered integral to the activities of the charitable NDPB and this may give rise to difficulties in ascertaining an estimate of the existing use value (EUV) of the asset. For example, a new structure could recreate the floor area and seating capacity of a medieval cathedral but such a structure would not recreate the uniqueness of the original in terms of the religious and historical significance. E5 CA 2006 §409 INVESTMENT ASSETS SI 1996/189 Sch 3 Note: investment assets (excluding investment properties) will generally meet the definition of a financial asset, and therefore be subject to the disclosure requirements of FRSs 25, 26 and 29. For these requirements, see E12. E5.1 Have investment assets (including investments, investment properties, and SORP 295 SSAP 19.11 cash held for investment purposes) been classified as a separate category within fixed assets (except where the intention is to realise an asset without the reinvestment of the sale proceeds)? E5.2 Where the intention is to realise an investment asset without the SORP 295 reinvestment of the sale proceeds, has it been classified as a current asset? E5.3 Have all investment assets, other than programme related investments, SORP 296 been shown in the balance sheet at market value or at the Trustees‟ best estimate of market value? Note: market value best represents a true and fair view of the value of SORP 296 these assets to the charitable NDPB. Auditors should consider whether the method of valuation represents a “significant estimation technique” per FRS 18. See A6.4 (b). E5.4 Have investment assets not been depreciated? SORP 296 SSAP 19.11 E5.5 For investment assets for which there is no readily identifiable market price, SORP 297 have the Trustees adopted a reasonable approach? Note: a reasonable approach to, for example, shares in unlisted companies SORP 297 FReM 6.2.3 may be to value them by reference to their underlying net assets or earnings or the dividend record, as appropriate. But where the cost of obtaining a valuation by one of these methods outweighs the benefit to the users of the accounts, or lacks reliability, the investment may be included at cost. E5.6 For investment assets other than shares or securities (e.g. property), have SORP 298 the Trustees used a reasonable approach to market valuations? Note: valuations must be done at least every five years, subject only to the SORP 298 Trustees obtaining advice as to the possibility of any material movements between individual valuations. Where the charitable NDPB has a number of such assets, valuations may be carried out on a rolling basis over a five- year period. E5.7 Where there is a material movement in market valuation of investment SORP 298 assets other than shares or securities (e.g. property), have the assets been revalued? E5.8 Has the following been disclosed separately in the investment asset note to the financial statements: (a) investments held primarily to provide an investment return for the SORP 299 (a) SORP 308 charitable NDPB? (b) programme related investments that the charitable NDPB makes SORP 299 (b) SORP 308 primarily as part of its charitable activities? E5.9 Where values are determined other than by reference to readily available market prices, has the following information been disclosed in the notes to the financial statements: (a) the name and qualification (if any) of the valuer and whether they are SORP 300 (a) SSAP 19.12 a member of staff or a Trustee or external to the charitable NDPB? (b) the basis or bases of valuation? SORP 300 (b) E5.10 Where the Trustees feel that the size or nature of a holding of securities is such that the market is not capable of absorbing the sale of the shareholding without a material effect on the quoted price, have the Trustees: (a) summarised the position in the notes? SORP 301 (b) where possible, included in the summary of the position an opinion SORP 301 on how much the market price should be adjusted to take this fact into consideration? Note: such cases will be rare. SORP 301 E5.11 Have all changes in the value of investment assets and a reconciliation of SORP 302 and Table 9 SSAP 19.13 the opening and closing book values been shown in the notes to the financial statements? E5.12 Has the total value of investment assets at the end of the financial year been disclosed, divided between distinct classes of investment, such as, where appropriate: (a) investment properties? SORP 303 (a) (b) investments listed on a recognised stock exchange or valued by SORP 303 (b) reference to such investments (e.g. common investment funds), open ended investment companies, and unit trusts? (c) investments in subsidiary or associated undertakings or in SORP 303 (c) companies which are connected persons? (d) other unlisted securities? SORP 303 (d) (e) cash and settlements pending, held as part of the investment SORP 303 (e) portfolio? (f) any other investments? SORP 303 (f) E5.13 Have items in SORP 303 categories (a) to (f) (see E5.12) been further analysed between: (a) investment assets in the UK? SORP 304 (i) (b) investment assets outside the UK? SORP 304 (ii) Note: where investments relate to companies listed on a UK stock SORP 305 exchange or incorporated in the UK they should be treated as investment assets in the UK. E5.14 Have further details been given in the notes to the financial statements of SORP 306 any particular investment that is material in the context of the investments portfolio? E5.15 Has the value of investments held in each type of fund been shown in the SORP 307 SSAP 19.15 notes to the financial statements (see also A3.12)? E5.16 Have investments held on behalf of government more generally (i.e. FReM 2008/09 6.2.1 investments not held to further the charitable NDPB's objectives and not recognised in the balance sheet) been recognised in a separate trust statement? Not required by FReM 2009-10, but best practice per FReM 2008-09 Programme Related Investments E5.17 Have programme related investments been included in the balance sheet at SORP 309 the amount invested, less any impairments (in the case of equity or loans) and any amounts repaid (in the case of loans)? E5.18 Have any impairments of programme related investments been charged to SORP 309 resources expended on charitable activities? E5.19 Where a loan has subsequently been converted to a grant, has it been SORP 309 charged to resources expended on charitable activities? E5.20 Where a gain is made on the disposal of a programme related investment, SORP 310 has the gain either been set off against any prior impairment loss, or included as a gain on disposal of fixed assets for the charitable NDPB‟s own use and recorded under “other incoming resources? E5.21 Where the use of programme related investments forms a material part of SORP 311 the work of the charitable NDPB, or the amounts form a material part of the investment assets of the charitable NDPB, have all changes in the carrying values of programme related investments, including any impairment losses, and a reconciliation of the opening and closing carrying values of such investments, been disclosed in the notes to the financial statements? E5.22 Has an analysis of programme related investments held between equity, SORP 312 loan and other investments, together with an indication of the charitable objectives, programmes or projects the investment supports, been disclosed in the notes to the financial statements? E6 CURRENT ASSETS - ALL CLASSES E6.1 Where current assets have not been stated at the lower of: SORP 313 (a) the purchase price or production cost and net realisable value; or (b) current replacement cost and recoverable amount (i.e. net realisable value) has this fact been disclosed? E7 STOCKS Note: it is very unlikely that charitable NDPBs will have work in progress SSAP 9 22 and 9.28 - 9.30 SORP Table 7 under long term contracts, as defined by SSAP 9.22. If the charitable NDPB does have long term contract work in progress, refer to SSAP 9, in particular SSAP 9.28 to 9.30. E7.1 Have stocks been appropriately sub-classified? SSAP 9.27 SI 2008/410 Format E7.2 Where the current replacement cost of stocks held for continuing use is FReM 2008/09 2.1.5 materially different from historic cost, have stocks been valued and disclosed at current replacement cost? Not required by FReM 2009-10, but best practice per FReM 2008-09 E8 DEBTORS E8.1 Where long term debtors (i.e. debtors due after more than one year) are SORP 315 FReM 2008/09 6.4.3 material in the context of total net current assets, have they been disclosed UITF 4.3 separately on the face of the balance sheet? Not required by FReM 2009- 10, but best practice per FReM 2008-09 E8.2 Where long term debtors are not material in the context of total net current DY note 19 assets, have they been disclosed separately in the notes to the accounts? E8.3 Has the debtors note been analysed into at least the following categories: (a) trade debtors? SORP 314 (a) (b) amounts due from subsidiary and associated undertakings? SORP 314 (b) (c) other debtors? SORP 314 (c) (d) prepayments and accrued income? SORP 314 (d) (e) other categories, as appropriate? SORP 314 Note: refer to FReM 7.4.43 for examples of other categories which may FReM 2008/09 7.4.43 DY note 18 (a) be relevant. Not required by FReM 2009-10, but best practice per FReM 2008-09 E8.4 Has the amount falling due after more than one year been shown SORP 314 SI 2008/410 Format separately for each category included under debtors? Disclosure of intra-government balances E8.5 Has an analysis of debtor balances between the following been given: DY note 18 (b) (a) balances with other central government bodies (including pensions FReM 5.4.45 (a) and other central government funds)? (b) balances with local authorities? FReM 5.4.45 (b) (c) balances with NHS bodies? FReM 5.4.45 (c) (d) balances with public corporations and trading funds? FReM 5.4.45 (d) (e) subtotal of intra-government balances? (f) balances with bodies external to government? FReM 5.4.45 (e) Note: details of the WGA boundary can be found on the WGA website at www.wga.gov.uk. E8.6 Have the amounts falling due within one year and the amounts falling due SORP 314 DY note 18 (b) after one year been separately disclosed for each line item in the analysis provided under E8.5? E9 CURRENT ASSET INVESTMENTS E9.1 Have current asset investments been disclosed in accordance with the SORP 316 disclosure requirements for investment assets (see E5.8 - E5.16)? E10 CASH E10.1 Has 'cash' that does not meet the definition of cash in FRS 1 been FRS 1.2 disclosed as another type of current asset? E10.2 Have any overdrawn cash balances been disclosed as a current liability FReM 5.4.47 a) and not as cash? Note: the cash flow statement (FRS 1) definition of cash treats overdrafts as a negative cash balance. Whereas, the balance sheet treatment is as a current liability. Where there is an overdraft, there should be a reconciliation at the foot of the cash flow statement. E10.3 Have the following been disclosed: FReM 5.4.46 (a) the opening cash position? (b) the net change in cash balances? (c) the closing cash position? E10.4 Has the closing cash position been analysed between: FReM 5.4.46 DY note 19 (a) balances held with the Office of HM Paymaster General? (b) balances held in commercial banks and cash in hand? E11 CREDITORS E11.1 Have creditors been recognised at their settlement value? SORP 317 E11.2 Has the creditors note been analysed into at least the following categories: (a) loans and overdrafts? SORP 318 (a) (b) trade creditors? SORP 318 (b) (c) amounts due to subsidiary and associated undertakings? SORP 318 (c) (d) other creditors? SORP 318 (d) (e) accruals and deferred income? SORP 318 (e) (f) other categories, as appropriate? SORP 318 Note: refer to FReM 7.4.46 for examples of other categories which may FReM 5.4.47 DY note 20 (a) be relevant. E11.3 Has the amount falling due after more than one year been shown SORP 318 separately for each category included under creditors? Finance leases and hire purchase contracts E11.4 Have obligations under finance leases, hire purchase and on balance sheet SSAP 21.51 PFI contracts been disclosed separately from other obligations and liabilities? E11.5 Have obligations under finance leases, hire purchase and on-balance sheet SSAP 21.52 PFI contracts been analysed in a note between the net amounts payable: (a) in not more than 1 year? (b) in more than 1 year but not more than 5 years? (c) in more than 5 years? Note: the method of apportionment of lease rentals between capital, FRS 18.57 FRS 18.55 interest and service elements may represent a “significant estimation technique” per FRS 18, requiring the following disclosures: (a) where the method is a significant estimation technique, see A6.4 (b) Link to A6.4 (per link). (b) (a) where the method is a significant estimation technique, and the Link to A6.4 method has been changed, see A6.4 (c) (per link). (c) Creditors repayable after 5 years E11.6 In relation to any debts repayable wholly or partly after 5 years, have the FReM 2008/09 7.4.33 following disclosures been made: Not required by FReM 2009-10, but best practice per FReM 2008-09 (a) the amount repayable other than by instalments? SI 2008 410 61 (b) the portion of any instalment debt falling due after more than 5 SI 2008 410 61 years? (c) the terms of payment or repayment and the rate of any interest SI 2008 410 61 payable on the debt? Secured creditors E11.7 Have the amount of secured creditors and the nature of the security given SI 2008 410 61 been disclosed? Disclosure of intra-government balances E11.8 Has an analysis of creditor balances between the following been given: DY note 20 (b) (a) balances with other central government bodies (including pensions FReM 5.4.48 a) and other central government funds)? (b) balances with local authorities? FReM 5.4.48 b) (c) balances with NHS bodies? FReM 5.4.48 c) (d) balances with public corporations and trading funds? FReM 5.4.48 d) (e) subtotal of intra-government balances? (f) balances with bodies external to government? FReM 5.4.48 e) Note: details of the WGA boundary can be found on the WGA website at www.wga.gov.uk. E11.9 Have the amounts falling due within one year and the amounts falling due DY note 20 (b) after one year been separately disclosed in the analysis provided under E11.3? E12 FReM 2008/09 9.1.10 FINANCIAL INSTRUMENTS Note (1): FRS 29 Financial Instruments: Disclosures, which this section FRS 29.3 (a) - (e) covers, applies to all types of financial instruments except, in general terms: (a)subsidiary, quasi-subsidiary and associated undertakings, partnerships and joint ventures (excepting those that are accounted for as financial instruments, and all derivatives linked to interests in subsidiaries, quasi-subsidiary and associated undertakings, partnerships and joint ventures); (b) employers' rights and obligations arising from employee benefit plans; (c) contracts for contingent consideration in a business combination in respect of the acquirer; (d) insurance contracts (excepting embedded derivatives in insurance contracts and financial guarantee contracts); (e) financial instruments, contracts and obligations under share-based payment transactions. See FRS 29.3 for the precise terms of application of FRS 29. Not required by FReM 2009-10, but best practice per FReM 2008-09 Note (2): any financial instrument that is not held in furtherance of the FReM 2008/09 9.1.8 a) charitable NDPB‟s objectives but is held on behalf of government more generally should be accounted for in a separate Trust Statement. charitable NDPBs should discuss such cases with the relevant authorities. Not required by FReM 2009-10, but best practice per FReM 2008-09 Note (3): special or „golden‟ shares, being those shares retained in FReM 2008/09 9.1.8 b) businesses that have been privatised but in which the department wishes to retain a regulatory interest or reserve power, should not be recognised on balance sheet. Not required by FReM 2009-10, but best practice per FReM 2008-09 Note (4): loans and other interests in public bodies outside the FReM 2008/09 9.1.8 c) departmental boundary should be reported at historical cost, less any impairment. Not required by FReM 2009-10, but best practice per FReM 2008-09 Note (5): where there a number of alternative accounting treatments - e.g. FReM 2008/09 9.1.9 a) - c) in the designation, and the reclassification, of financial assets and liabilities, and the treatment of financial guarantee contracts - the charitable NDPB should discuss any significant choices to be made with the relevant authority (through its sponsoring bodies where appropriate) to ensure that the budgeting implications have been properly considered. Not required by FReM 2009-10, but best practice per FReM 2008-09 Significance of financial instruments for financial position and performance E12.1 Taking into account the disclosures required by FRS 29.8 to 29.30 (and FRS 29.7 thus responses to E12.2 to E12.29), has sufficient information that enables users of the financial statements to evaluate the significance of financial instruments for the charitable NDPB's financial position and performance been disclosed? Balance sheet Categories of financial assets and financial liabilities E12.2 Have the carrying amounts of each of the following categories, as defined in FRS 26, been disclosed either on the face of the balance sheet or in the notes: (a) financial assets at fair value through profit or loss, showing separately: (i) those designated as such upon initial recognition? FRS 29.8 (a) (i) (ii) those classified as held for trading in accordance with FRS FRS 29.8 (a) (ii) 26? (b) held-to-maturity investments? FRS 29.8 (b) (c) loans and receivables? FRS 29.8 (c) (d) available-for-sale financial assets? FRS 29.8 (d) (e) financial liabilities at fair value through profit or loss, showing separately: (i) those designated as such upon initial recognition? FRS 29.8 (e) (i) (ii) those classified as held for trading in accordance with FRS FRS 29.8 (e) (ii) 26? (f) financial liabilities measured at amortised cost? FRS 29.8 (f) Note: other descriptors for these categories or other categorisations when FRS 26.45 presenting information on the face of the financial statements may be used. Financial assets or financial liabilities at fair value through profit or loss E12.3 Where the charitable NDPB has designated a financial liability as at fair value through profit or loss per FRS 26.9, has the following been disclosed: (a) the amount of change, during the period and cumulatively, in the FRS 29.10 (a) fair value of the financial liability that is attributable to changes in the credit risk of that liability determined either: (i) as the amount of change in its fair value that is not attributable to changes in market conditions that give rise to market risk (see FRS 29 Appendix B.4); or (ii) using an alternative method the charitable NDPB believes more faithfully represents the amount of change in its fair value that is attributable to changes in the credit risk of the liability? Note: changes in market conditions that give rise to market risk FRS 29.10 (a) include changes in a benchmark interest rate, the price of another entity's financial instrument, a commodity price, a foreign exchange rate or an index of prices or rates, and for contracts that include a unit-linking feature, changes in the performance of the related internal or external investment fund. (b) the difference between the financial liability's carrying amount and FRS 29.10 (b) the amount the charitable NDPB would be contractually required to pay at maturity to the holder of the obligation? E12.4 Have the methods used to comply with the requirements in FRS 29.10 (a) FRS 29.11 (a) been disclosed? E12.5 Where the charitable NDPB believes that the disclosure it has given to FRS 29.11 (b) comply with the requirements in FRS 29.10 (a) does not faithfully represent the change in the fair value of the financial asset or financial liability attributable to changes in its credit risk, have the reasons for reaching this conclusion, and the factors the charitable NDPB believes are relevant, been disclosed? Reclassification E12.6 Where the charitable NDPB has reclassified a financial asset as one FRS 29.12 measured: (a) at cost or amortised cost, rather than at fair value; or (b) at fair value, rather than at cost or amortised cost, has the amount reclassified into and out of each category and the reason for that reclassification (see FRS 26.51-54) been disclosed? Derecognition E12.7 Where the charitable NDPB has transferred financial assets in such a way that part or all of the financial assets do not qualify for derecognition (FRS 26.15-37), has the following been disclosed for each class of such financial assets: (a) the nature of the assets? FRS 29.13 (a) (b) the nature of the risks and rewards of ownership to which the FRS 29.13 (b) charitable NDPB remains exposed? (c) where the charitable NDPB continues to recognise all of the FRS 29.13 (c) assets, the carrying amounts of the assets and of the associated liabilities? (d) where the charitable NDPB continues to recognise the assets to the extent of its continuing involvement: (i) the total carrying amount of the original assets? FRS 29.13 (d) (ii) the amount of the assets that the charitable NDPB FRS 29.13 (d) continues to recognise? (iii) the carrying amount of the associated liabilities? FRS 29.13 (d) Collateral E12.8 Has the carrying amount of financial assets pledged as collateral for FRS 29.14 (a) liabilities or contingent liabilities been disclosed? E12.9 Have the terms and conditions relating to any pledge of financial assets as FRS 29.14 (b) collateral for liabilities or contingent liabilities been disclosed? E12.10 Where the charitable NDPB holds collateral (of financial or non-financial assets) and is permitted to sell or repledge the collateral in the absence of default by the owner of the collateral, has the following been disclosed: (a) the fair value of the collateral held? FRS 29.15 (a) (b) the fair value of any such collateral sold or repledged? FRS 29.15 (b) (c) whether the charitable NDPB has an obligation to return any such FRS 29.15 (b) collateral sold or repledged? (d) the terms and conditions associated with its use of the collateral? FRS 29.15 (c) Allowance account for credit losses E12.11 Where financial assets are impaired by credit losses and the charitable FRS 29.16 NDPB records the impairment in a separate account (e.g. an allowance account used to record individual impairments or a similar account used to record a collective impairment of assets) rather than directly reducing the carrying amount of the asset, has a reconciliation of changes in that account during the period for each class of financial assets been disclosed? Compound financial instruments with multiple embedded derivatives E12.12 Where the charitable NDPB has issued an instrument that contains both a FRS 29.17 liability and an equity component (see FRS 25.28) and the instrument has multiple embedded derivatives whose values are interdependent (such as a callable convertible debt instrument), has the existence of those features been disclosed? Defaults and breaches E12.13 For loans payable recognised at the reporting date, has the following been disclosed: (a) details of any defaults during the period of principal, interest, FRS 29.18 (a) sinking fund, or redemption terms of those loans payable? (b) the carrying amount of the loans payable in default at the FRS 29.18 (b) reporting date? (c) whether the default was remedied, or the terms of the loans FRS 29.18 (c) payable were renegotiated, before the financial statements were authorised for issue? E12.14 Where there were breaches of loan agreement terms other than those under FRS 29.18 during the period, those breaches permitted the lender to demand accelerated repayment (unless the breaches were remedied, or the terms of the loan were renegotiated, on or before the reporting date), has the following been disclosed: (a) details of any defaults during the period of principal, interest, FRS 29.19 sinking fund, or redemption terms of those loans payable? (b) the carrying amount of the loans payable in default at the FRS 29.19 reporting date? (c) whether the default was remedied, or the terms of the loans FRS 29.19 payable were renegotiated, before the financial statements were authorised for issue? Other disclosures Hedge accounting Note: the use of hedge accounting should be discussed with the relevant FReM 2008/09 9.2.8 d) authorities (through sponsoring bodies where appropriate) to ensure that the budgeting implications of the choice of alternative accounting treatments have been properly considered. Not required by FReM 2009- 10, but best practice per FReM 2008-09 E12.15 For each type of hedge described in FRS 26 (i.e. fair value hedges, cash flow hedges, and hedges of net investments in foreign operations), has the following been separately disclosed: (a) a description of each type of hedge? FRS 29.22 (a) (b) a description of the financial instruments designated as hedging FRS 29.22 (b) instruments and their fair values at the reporting date? (c) the nature of the risks being hedged? FRS 29.22 (c) E12.16 For cash flow hedges, has the following been disclosed: (a) the periods when the cash flows are expected to occur and when FRS 29.23 (a) they are expected to affect profit or loss? (b) a description of any forecast transaction for which hedge FRS 29.23 (b) accounting had previously been used, but which is no longer expected to occur? (c) the amount that was recognised in equity during the period? FRS 29.23 (c) (d) the amount that was removed from equity and included in profit or FRS 29.23 (d) loss for the period, showing the amount included in each line item in the income statement? (e) the amount that was removed from equity during the period and FRS 29.23 (e) included in the initial cost or other carrying amount of a non-financial asset or non-financial liability whose acquisition or incurrence was a hedged highly probable forecast transaction? Note: these requirements are framed in the context of an entity preparing a profit and loss account and statement of total recognised gains and losses. Their application to the charitable NDPB and its SOFA should be undertaken with regard to the underlying principles of FRSs 25, 26 and 29, and considerations of materiality and presentation. E12.17 Have the gains or losses in fair value hedges been separately disclosed: (a) on the hedging instrument? FRS 29.24 (a) (i) (b) on the hedged item attributable to the hedged risk? FRS 29.24 (a) (ii) E12.18 Has the ineffectiveness recognised in profit or loss that arises from cash FRS 29.24 (b) flow hedges been separately disclosed? E12.19 Has the ineffectiveness recognised in profit or loss that arises from hedges FRS 29.24 (c) of net investments in foreign operations been separately disclosed? Note: the requirements in E12.18 and E12.19 are framed in the context of an entity preparing a profit and loss account and statement of total recognised gains and losses. Their application to the charitable NDPB and its SOFA should be undertaken with regard to the underlying principles of FRSs 25, 26 and 29, and considerations of materiality and presentation. Fair value Note (1): where FRS 29 requires disclosures by class of financial FRS 29.6 instrument, financial instruments should be grouped into classes that are appropriate to the nature of the information disclosed and that take into account the characteristics of those financial instruments. Sufficient information should be provided to permit reconciliation to the line items presented in the balance sheet. Note (2): the classes described in FRS 29.6 should be determined by the FRS 29.B1, B2 FRS 26.45 charitable NDPB and are, thus, distinct from the categories of financial instruments specified in IAS FRS 26.9 (and set out in FRS 29.8). In determining classes of financial instrument, the charitable NDPB should, at a minimum: (a) distinguish instruments measured at amortised cost from those measured at fair value; and (b) treat as a separate class or classes those financial instruments outside the scope of this IFRS. E12.20 Has the fair value of each class of financial assets and financial liabilities FRS 29.25 been disclosed in a way that permits it to be compared with its carrying amount (excluding the exceptions given in FRS 29.29)? Note: disclosures of fair value are not required (a) where the carrying FRS 29.29 amount is a reasonable approximation of fair value (for example, for financial instruments such as short-term trade receivables and payables); (b) for an investment in equity instruments that do not have a quoted market price in an active market, or derivatives linked to such equity instruments, that is measured at cost in accordance with FRS 26 because its fair value cannot be measured reliably; and (c) for a contract containing a discretionary participation feature (as described in FRS 26 Appendix C) if the fair value of that feature cannot be measured reliably. E12.21 Has the fair value of each class of financial assets and financial liabilities FRS 29.26 been offset only to the extent that their carrying amounts are offset in the balance sheet? E12.22 Have the methods and, where a valuation technique is used, the FRS 29.27 (a) assumptions applied in determining fair values of each class of financial assets or financial liabilities been disclosed? Note: the assumptions may relate, for example, to prepayment rates, rates FRS 29.27 (a) of estimated credit losses, and interest rates or discount rates. E12.23 Where fair values are determined, in whole or in part, directly by reference FRS 29.27 (b) to published price quotations in an active market, has this fact been disclosed? E12.24 Where fair values are estimated using a valuation technique (see FRS FRS 29.27 (b) 26.AG71–79), has this fact been disclosed? E12.25 Where the fair values recognised or disclosed in the financial statements FRS 29.27 (c) are determined in whole or in part using a valuation technique based on assumptions that are not supported by prices from observable current market transactions in the same instrument (i.e. without modification or repackaging) and not based on available observable market data, has this fact been disclosed? E12.26 For fair values that are recognised in the financial statements, where FRS 29.27 (c) changing one or more of those assumptions to reasonably possible alternative assumptions would change fair value significantly, has this fact and the effect of those changes been disclosed? Note: for this purpose, significance shall be judged with respect to profit or FRS 29.27 (c) loss, and total assets or total liabilities, or, when changes in fair value are recognised in equity, total equity. E12.27 Where FRS 29.27 (c) applies, has the total amount of the change in fair FRS 29.27 (d) value estimated using such a valuation technique that was recognised in profit or loss during the period been disclosed? E12.28 Where there is a difference between the fair value at initial recognition and the amount that would be determined at that date using the valuation technique, has the following, by class of financial instrument, been disclosed: (a) the charitable NDPB's accounting policy for recognising that FRS 29.28 (a) difference in profit or loss to reflect a change in factors (including time) that market participants would consider in setting a price (see FRS 26.AG76A)? (b) the aggregate difference yet to be recognised in profit or loss at FRS 29.28 (b) the beginning and end of the period and a reconciliation of changes in the balance of this difference? Note: the requirements in E12.26, E12.27 and E12.28 are framed in the context of an entity preparing a profit and loss account and statement of total recognised gains and losses. Their application to the charitable NDPB and its SOFA should be undertaken with regard to the underlying principles of FRSs 25, 26 and 29, and considerations of materiality and presentation. E12.29 In the cases described in FRS 29.29 (b) and (c), has information to help users of the financial statements make their own judgements about the extent of possible differences between the carrying amount of those financial assets or financial liabilities and their fair value been disclosed, including: (a) the fact that fair value information has not been disclosed for FRS 29.30 (a) these instruments because their fair value cannot be measured reliably? (b) a description of the financial instruments, their carrying amount, FRS 29.30 (b) and an explanation of why fair value cannot be measured reliably? (c) information about the market for the instruments? FRS 29.30 (c) (d) information about whether and how the charitable NDPB intends FRS 29.30 (d) to dispose of the financial instruments? (e) where financial instruments whose fair value previously could not FRS 29.30 (e) be reliably measured are derecognised, that fact, their carrying amount at the time of derecognition, and the amount of gain or loss recognised? Nature and extent of risks arising from financial instruments E12.30 Taking into account the disclosures required by FRS 29.33 to 29.42 (and FRS 29.31 thus responses to E12.31 to E12.58), has sufficient information that enables users of the financial statements to evaluate the nature and extent of risks arising from financial instruments to which the charitable NDPB is exposed at the reporting date been disclosed? Note: the risks that arise from financial instruments typically include, but are FRS 29.42 not limited to, credit risk, liquidity risk and market risk. The disclosures required by FRS 29.33 – 29.42 focus on these risks. Credit risk Qualitative disclosures E12.31 Have the charitable NDPB's exposures to credit risk and how they arise FRS 29.33 (a) been disclosed? E12.32 Has the charitable NDPB's objectives, policies and processes for managing FRS 29.33 (b) credit risk and the methods used to measure the risk been disclosed? E12.33 Have any changes in FRS 29.33 (a) or (b) (E12.31 and E12.32) from the FRS 29.33 (c) previous period been disclosed? Quantitative disclosures E12.34 Has summary quantitative data about the charitable NDPB's exposure to FRS 29.34 (a) credit risk at the reporting date been disclosed? Note: this disclosure should be based on the information provided internally FRS 29.34 (a) to key management personnel of the charitable NDPB, for example, the charitable NDPB's board of trustees or chief executive officer. For the purposes of FRS 29, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the charitable NDPB directly or indirectly. E12.35 Have the disclosures required by FRS 29.36 to 29.38 (E12.38 - E12.40), to FRS 29.34 (b) the extent that they are not provided under FRS 29.34 (a) (E12.34), been disclosed (except where the risk is not material)? E12.36 Have concentrations of risk where not apparent from FRS 29.34 (a) and (b) FRS 29.34 (c) (E 12.34 and E12.35) been disclosed? E12.37 Where the quantitative data disclosed as at the reporting date are FRS 29.35 unrepresentative of the charitable NDPB's exposure to credit risk during the period, has further information that is representative been disclosed? E12.38 Has the following been disclosed by class of financial instrument: (a) the amount that best represents the charitable NDPB's maximum FRS 29.36 (a) exposure to credit risk at the reporting date without taking account of any collateral held or other credit enhancements (e.g. netting agreements that do not qualify for offset in accordance with FRS 25)? (b) in respect of the amount disclosed in FRS 29.36 (a), a description FRS 29.36 (b) of collateral held as security and other credit enhancements? (c) information about the credit quality of financial assets that are FRS 29.36 (c) neither past due nor impaired? (d) the carrying amount of financial assets that would otherwise be FRS 29.36 (d) past due or impaired whose terms have been renegotiated? Note: where the charitable NDPB has a right of set-off, but does not FRS 29.36 intend to settle net or to realise the asset and settle the liability simultaneously, or where financial assets and financial liabilities subject to a master netting arrangement are not offset, the effect of the right or of the arrangement respectively on the charitable NDPB's credit risk exposure should be disclosed in accordance with FRS 29.36. Financial assets that are either past due or impaired E12.39 Has the following been disclosed by class of financial asset: (a) an analysis of the age of financial assets that are past due as at FRS 29.37 (a) the reporting date but not impaired? (b) an analysis of financial assets that are individually determined to FRS 29.37 (b) be impaired as at the reporting date, including the factors the charitable NDPB considered in determining that they are impaired? (c) for the amounts disclosed in FRS 29.37 (a) and (b), a description FRS 29.37 (c) of collateral held by the charitable NDPB as security and other credit enhancements and, except where impracticable, an estimate of their fair value? Collateral and other credit enhancements obtained E12.40 Where the charitable NDPB obtains financial or non-financial assets during the period by taking possession of collateral it holds as security or calling on other credit enhancements (e.g. guarantees), and such assets meet the recognition criteria in other standards, has the following been disclosed: (a) the nature and carrying amount of the assets obtained? FRS 29.38 (a) (b) where the assets are not readily convertible into cash, the FRS 29.38 (b) charitable NDPB's policies for disposing of such assets or for using them in its operations? Liquidity risk Qualitative disclosures E12.41 Have the charitable NDPB's exposures to liquidity risk and how they arise FRS 29.33 (a) been disclosed? E12.42 Has the charitable NDPB's objectives, policies and processes for managing FRS 29.33 (b) liquidity risk and the methods used to measure the risk been disclosed? E12.43 Have any changes in FRS 29.33 (a) or (b) (E12.41 and E12.42) from the FRS 29.33 (c) previous period been disclosed? Quantitative disclosures E12.44 Has summary quantitative data about the charitable NDPB's exposure to FRS 29.34 (a) liquidity risk at the reporting date been disclosed? Note: this disclosure should be based on the information provided internally FRS 29.34 (a) to key management personnel of the charitable NDPB, for example, the charitable NDPB's board of trustees or chief executive officer. For the purposes of FRS 29, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the charitable NDPB directly or indirectly. E12.45 Where not provided under FRS 29.34 (a) (E12.44), has a maturity analysis FRS 29.39 (a) FRS 29.34 (b) for financial liabilities that shows the remaining contractual maturities been disclosed (except where the risk is not material)? E12.46 Where not provided under FRS 29.34 (a) (E12.44), has a description of FRS 29.39 (b) FRS 29.34 (b) how the charitable NDPB manages the liquidity risk inherent in FRS 29.39 (a) (E12.45) been disclosed (except where the risk is not material)? E12.47 Have concentrations of risk, where not apparent from FRS 29.34 (a) and FRS 29.34 (c) FRS 29.39 (a) and (b) (E12.44 - E12.46), been disclosed? E12.48 Where the quantitative data disclosed as at the reporting date are FRS 29.35 unrepresentative of the charitable NDPB's exposure to liquidity risk during the period, has further information that is representative been disclosed? Market risk Note: market risk comprises three types of risk: currency risk, interest rate FRS 29 App. A risk and other price risk. Qualitative disclosures E12.49 Have the charitable NDPB's exposures to market risk and how they arise FRS 29.33 (a) been disclosed? E12.50 Has the charitable NDPB's objectives, policies and processes for managing FRS 29.33 (b) market risk and the methods used to measure the risk been disclosed? E12.51 Have any changes in FRS 29.33 (a) or (b) (E12.49 and E12.50) from the FRS 29.33 (c) previous period been disclosed? Quantitative disclosures E12.52 Has summary quantitative data about the charitable NDPB's exposure to FRS 29.34 (a) market risk at the reporting date been disclosed? Note: this disclosure should be based on the information provided internally FRS 29.34 (a) to key management personnel of the charitable NDPB, for example, the charitable NDPB's board of trustees or chief executive officer. For the purposes of FRS 29, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the charitable NDPB directly or indirectly. E12.53 Have the disclosures required by FRS 29.40 to 29.42 (E12.56 - E12.58), to FRS 29.34 (b) the extent that they are not provided under FRS 29.34 (a) (E12.52), been disclosed (except where the risk is not material)? E12.54 Have concentrations of risk where not apparent from FRS 29.34 (a) and (b) FRS 29.34 (c) (E12.52 and E12.53) been disclosed? E12.55 Where the quantitative data disclosed as at the reporting date are FRS 29.35 unrepresentative of the charitable NDPB's exposure to market risk during the period, has further information that is representative been disclosed? Sensitivity analysis E12.56 Except where the charitable NDPB prepares a sensitivity analysis as described in FRS 29.41, and uses it in place of the sensitivity analysis specified in FRS 29.40 (a), has the following been disclosed: (a) a sensitivity analysis for each type of market risk to which the FRS 29.40 (a) charitable NDPB is exposed at the reporting date, showing how profit or loss and equity would have been affected by changes in the relevant risk variable that were reasonably possible at that date? Note: this requirement is framed in the context of an entity preparing a profit and loss account and statement of total recognised gains and losses. Its application to the charitable NDPB and its SOFA should be undertaken with regard to the underlying principles of FRSs 25, 26 and 29, and considerations of materiality and presentation. (b) the methods and assumptions used in preparing the sensitivity FRS 29.40 (b) analysis? (c) changes from the previous period in the methods and FRS 29.40 (c) assumptions used, and the reasons for such changes? E12.57 Where the charitable NDPB prepares a sensitivity analysis, such as value- at-risk, that reflects interdependencies between risk variables (e.g. interest rates and exchange rates) and uses it to manage financial risks, and uses it in place of the sensitivity analysis specified in FRS 29.40: (a) has this analysis been disclosed in place of the analysis specified FRS 29.41 in IFRS 29.40? (b) has an explanation of the method used in preparing such a FRS 29.41 (a) sensitivity analysis, and of the main parameters and assumptions underlying the data provided been disclosed? (c) has an explanation of the objective of the method used and of FRS 29.41 (b) limitations that may result in the information not fully reflecting the fair value of the assets and liabilities involved been disclosed? Other market risk disclosures E12.58 Where the sensitivity analyses disclosed in accordance with FRS 29.40 or FRS 29.42 29.41 are unrepresentative of a risk inherent in a financial instrument (for example, because the year-end exposure does not reflect the exposure during the year), has that fact and the reason the charitable NDPB believes the sensitivity analyses are unrepresentative been disclosed? E13 PROVISIONS FOR LIABILITIES AND CHARGES E13.1 For transactions where an exchange for consideration does not arise (e.g. SORP 154-155 non-performance related grants), has a liability been recognised in accordance with FRS12, where appropriate - i.e. when a legal or constructive obligation to make future payments arises? Note: a constructive obligation arises where events have created a valid SORP 154 - 160 expectation in other parties that the charitable NDPB will discharge its obligations. This involves a commitment to another party that has been communicated to those affected in a sufficiently specific manner to raise a valid expectation on the part of the recipient that the charitable NDPB will discharge its responsibilities. SORP 154 - 160 provides guidance in relation to grants payable and constructive obligations. E13.2 Has expenditure resulting from provisions that arise due to a legal or SORP 321 constructive obligation (as per FRS 12) been accounted for in the SOFA, in accordance with SORP 148 to 163? E13.3 Have provisions been appropriately analysed in the balance sheet between SORP 321 liabilities due within one year and those falling due after one year? E13.4 Has the best estimate of the expenditure required to settle the present SORP 322 and 317 obligation at the balance sheet date or to transfer it to a third party at that time been recognised as the amount of the liability? E13.5 Where the effect is material, have outflows of resources required to settle SORP 323 an obligation at the balance sheet date been discounted to their present value? E13.6 Where the charitable NDPB has earmarked part of its unrestricted funds for SORP 325 and 329 future use, has this been recorded by setting up a designated fund disclosed as part of the unrestricted funds of the charitable NDPB (and not a provision)? E13.7 Have the particulars of all material commitments (e.g. grant commitments) SORP 326 in respect of specific charitable projects been disclosed in the notes where they have not been charged to the accounts? Note: click on "link" for the disclosure details required. Link to commitments E13.8 Has the following information been disclosed for each class of provision: (a) the carrying amount at the beginning of the period? SORP 328 (c) FRS 12.89 (a) SI 2006/410 § 70 (b) additional provisions made in the period, including increases to SORP 328 (d) FRS 12.89 (b) existing provisions? SI 2006/410 § 70 (c) amounts used (i.e. incurred and charged against the provision) FRS 12.89 (c) SI 2006/410 § 70 during the period? (d) unused amounts reversed during the period? SORP 328 (e) FRS 12.89 (d) SI 2006/410 § 70 (e) the increase during the period in the discounted amount arising from FReM 6.6.6 FRS 12.89 (e) the passage of time and the effect of any change in the discount rate? (f) the amount of commitments outstanding at the year end - the carrying SORP 328 (f) FRS 12.89 (a) amount at the end of the period? SI 2006/410 § 70 (g) an indication of amounts of commitments outstanding at the year SORP 328 (f) end due within one year and amounts due in over one year? Note: comparative information is not required. FRS 12.89 E13.9 Has the following information been disclosed for each class of provision: (a) the details of all material provisions? SORP 326 FReM 5.4.49 FRS 12.90 (a) SI 2006/410 § 70 (b) how the provision is calculated? FReM 5.4.49 (b) (c) the expected timing of any resulting transfers of economic benefits? FReM 5.4.49 (c) FRS 12.90 (a) SORP 327 (d) an indication of the uncertainties about the amount or timing of those FRS 12.90 (b) transfers of economic benefits? (e) where the time value of money is significant, the discount rate? FReM 5.4.49 (d) Note: in the case of provisions for early departure costs, the discount FReM 5.4.49 (d) rate is set by HM Treasury. (f) where necessary to provide adequate information, the major FRS 12.90 (b) assumptions made concerning future events? (g) the amount of any expected reimbursement, stating the amount that FRS 12.90 (c) has been recognised for that expected reimbursement? Note: the method of valuation of provisions (e.g. assumptions, expected FRS 18.57 FRS 18.55 values and discount rates) may represent a “significant estimation technique” per FRS 18, requiring the following disclosures: (a) where the method is a significant estimation technique, see A6.4 (b) Link to A6.4 (per link). (b) (a) where the method is a significant estimation technique, and the Link to A6.4 method has been changed, see A6.4 (c) (per link). (c) Note: in the extremely rare cases where disclosure of the information in the FRS 12.97 section above could seriously prejudice the position of the charitable NDPB in a dispute with other parties, the charitable NDPB should disclose the general nature of the dispute and why the information has not been disclosed. E14 PENSION SCHEME ASSET/LIABILITY E14.1 Has any asset or liability derived from a surplus or deficit in a defined SORP 330 benefit pension scheme been calculated in accordance with FRS 17? E14.2 Have such assets or liabilities been disclosed on the face of the balance SORP 330 sheet, under "defined benefit pension scheme asset/liability"? E14.3 Has a pension reserve been created where the charitable NDPB has a SORP 335 pension asset or liability? E15 DONATED ASSET RESERVE AND REVALUATION RESERVE For charities, any gains or losses whether realised or unrealised will belong to the fund in which the associated assets are held. Charities should follow the Charities SORP in this respect. Therefore the normal requirement for NDPBs to recognise and disclose movements and balances on the revaluation reserve does not apply. Similarly, charities should follow the SORP in their treatment of donated assets, effectively removing the normal requirement for charitable NDPBs to show a donated assets reserve. D16 CAPITAL Note: the financing of public sector entities is ultimately tax-based FRS 29.42A and an FRS 29-based notion of capital does not apply to many of them. Capital disclosures should be given only with the agreement of the relevant authority (through the parent or sponsoring department where appropriate). D16.1 Has information that enables users of its financial statements to evaluate FRS 29 App E the charitable NDPB's objectives, policies and processes for managing capital been disclosed, including: (a) qualitative information about its objectives, policies and processes FRS 29 App E2a for managing capital, including (but not limited to): (i) a description of what it manages as capital? FRS 29 App E2ai (ii) where the charitable NDPB is subject to externally imposed FRS 29 App E2aii capital requirements, the nature of those requirements and how those requirements are incorporated into the management of capital? (iii) how it is meeting its objectives for managing capital? FRS 29 App E2aiii (b) summary quantitative data about what it manages as capital? FRS 29 App E2b (c) any changes in (a) and (b) from the previous period? FRS 29 App E2c (d) whether during the period it complied with any externally imposed FRS 29 App E2d capital requirements to which it is subject? (e) where the charitable NDPB has not complied with such externally FRS 29 App E2e imposed capital requirements, the consequences of such non- compliance? Note (1): these disclosures should be based on the information provided FRS 29 App E2 internally to the charitable NDPB's key management personnel. Note (2): separate information for each capital requirement to which the FRS 29 App E3 charitable NDPB is subject should be disclosed. Comments/links yes no n/a Supplement E2 Note: this link only works if "Supplement E2" sheet has been activated in the "Initial questions" sheet DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref Comments/links SECTION F: CASH FLOW STATEMENT F1 THE PRIME STATEMENT F1.1 Has FRS1 been applied? Not required by FReM 2009-10, but best practice FReM 2008/09 7.4.24 SORP 351 per FReM 2008-09 SORP 352 F1.2 Are the cash flows disclosed under the following headings (where applicable FRS 1.7 and taking account of the points below) with a total for each heading: (a) net cash flow from operating activities? FRS 1.7 (b) dividends from joint ventures and associates? FRS 1.7 (c) returns on investments and servicing of finance? FRS 1.7 (d) taxation? FRS 1.7 (e) capital expenditure and financial investment? FRS 1.7 (f) acquisitions and disposals? FRS 1.7 (g) management of liquid resources? FRS 1.7 (h) financing? FRS 1.7 F1.3 Has an analysis of the cash movements from operating activities in the cash SORP 353 flow to accord with the SOFA been included in the cash flow statement? Note: the starting point should normally be “net incoming/outgoing resources before other recognised gains and losses”. F1.4 Have transactions which do not result in cash flows been excluded from the SORP 354 cash flow statement? Note: transactions which do not result in cash flows should be disclosed in FRS 1.46 SORP 355 (a) the notes, where necessary for an understanding of the underlying transactions. F2 NOTES TO THE CASH FLOW STATEMENT Note: where FRS 1 has been applied, the notes described under the green FRS 1.8 headings should be disclosed either adjoining the cash flow statement (as long as they are clearly labelled and kept separate) or as notes. F2.1 Have the following reconciliations been included in the notes to the cash flow statement: (a) of cash flows from “operating activities” within the cash flow statement SORP 355 (c) to the "net incoming/outgoing resources” line of the SOFA? (b) of cash (and any financing) movements to the opening and closing SORP 355 (b) balance sheet amounts? Reconciliation of operating cost to operating cash flows F2.2 Has the following been shown separately in a note reconciling the net FRS 1.12 DY Note 24 (a) incoming/outgoing resources before other recognised gains and losses from SORP 353 operating activities: (a) adjustments for non-cash transactions (e.g. depreciation)? DY Note 24 (a) SORP 355 (a) (b) adjustments for movements in working capital other than cash (e.g. FRS 1.12 DY Note 24 (a) stock, debtors, creditors)? Note: the adjustment for movements in working capital should show only the movements relating to operating activities. Opening and closing debtors and creditors relating to the purchase or sale of fixed assets, or relating to other line items in the cash flow statement, should be adjusted for in arriving at the cash received or paid under those headings, as shown in the prime statement. (c) use of provisions (i.e. cash flows in respect of operating items relating FRS 1.11 DY Note 24 (a) to provisions)? Returns on investments and servicing of finance F2.3 Has the following been shown separately in a note analysing the total for FRS 1.8 FRS 1.1 3 returns on investments and servicing of finance: (a) interest received, including any related tax recovered? FRS 1.14 (a) (b) dividends received (except dividends from equity-accounted entities, FRS 1.14 (b) i.e. associates and joint ventures), net of any tax credits? (c) interest paid, even where capitalised, including any tax deducted and FRS 1.15 (a) paid to the relevant tax authority? (d) the interest element of finance lease rental payments? FRS 1.15 (c) (e) cash flows that are treated as finance costs under FRS4? FRS 1.15 (b) Taxation F2.4 Has the following been shown separately in a note analysing the total for FRS 1.8 FRS 1.16 taxation: (a) cash receipts from tax rebates, claims or returns of overpayments FRS 1.17 (including, for a subsidiary, cash receipts from other members of the same group for group relief)? (b) cash payments for tax, including advance corporation tax (and FRS 1.18 including, for a subsidiary, payments made to other members of the same group for group relief)? Capital expenditure and financial investment F2.5 Has the following been shown separately in a note analysing the total for FRS 1.19 - 1.21 DY Note 24 (b) capital expenditure and financial investment: (a) payments to acquire intangible fixed assets? FRS 1.21 (a) (b) payments (gross) to acquire investments (other than those classed as FRS 1.21 (b) SORP 354 (b) “liquid resources”)? (c) payments to acquire tangible fixed assets? FRS 1.21 (a) (d) receipts from sales or disposals of intangible fixed assets? FRS 1.20 (a) (e) receipts from sales or disposals of tangible fixed assets? FRS 1.20 (a) (f) receipts (gross) from sales or disposals of investments (other than FRS 1.20 (b) SORP 354 (b) those classed as “liquid resources”)? (g) loans made to other bodies? FRS 1.21 (b) (h) loans repaid by other bodies? FRS 1.20 (b) F2.6 Has a single row been included in this section showing the net movement in SORP 354 (b) cash flows attributable to endowment investments? F2.7 Has a corresponding row been included in the “financing” section for the SORP 354 (b) same amount? Note: where a trade, business, subsidiary, associate or joint venture is FRS 1.20 (b) FRS 1.21 (b) acquired or disposed of, the cash flows arising should be shown under “acquisitions and disposals”. Acquisitions and disposals F2.8 Has the following been shown separately in a note analysing the total for acquisitions and disposals: (a) receipts from sales of investments in subsidiary undertakings (showing FRS 1.23 (a) separately any balances of cash and overdrafts transferred as part of the sale)? (b) receipts from sales of investments in associates or joint ventures? FRS 1.23 (b) (c) receipts from sales of trades or businesses? FRS 1.23 (c) (d) payments to acquire investments in subsidiary undertakings (showing FRS 1.24 (a) separately any balances of cash and overdrafts acquired)? (e) payments to acquire investments in associates and joint ventures? FRS 1.24 (b) (f) payments to acquire trades or businesses? FRS 1.24 (c) Management of liquid resources Note: the cash flows in this section can be shown in a single section with FRS 1.26 those under 'financing', provided that separate subtotals for each are given. F2.9 Has the following been shown separately in a note analysing the total for management of liquid resources: (a) withdrawals from short-term deposits not qualifying as cash, where FRS 1.27 (a) FRS 1.9 (b) they are not shown net? (b) receipts from disposal or redemption of any other investments held as FRS 1.27 (b) liquid resources? (c) payments into short-term deposits not qualifying as cash, where they FRS 1.28 (a) FRS 1.9 (b) are not shown net? (d) payments to acquire any other investments held as liquid resources? FRS 1.28 (b) Analysis of financing Note: the cash flows in this section can be shown in a single section with FRS 1.29 those under 'management of liquid resources', provided that separate subtotals for each are given. F2.10 Have cash donations to endowment been treated as additions to SORP 354 (a) endowment in the “financing” section? F2.11 Has the following been shown separately in a note analysing financing: (a) payments made out of permanent endowment? SORP 354 (c) DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref SECTION G: OTHER NOTES Note: this section of the guide addresses aspects of disclosure not covered elsewhere in the guide. It does not seek to address all notes that may be needed. In general, note disclosures should be given where it would improve users' understanding of the financial statements, and of the financial position and performance of the charitable NDPB. Reference should be made to the SORP and the FReM . G1 EVENTS AFTER THE BALANCE SHEET DATE G1.1 Has the charitable NDPB disclosed the date when the financial statements FReM 5.4.24 FRS 21.17 were authorised for issue and who gave that authorisation? Note: the date of the Accounting Officer's authorisation for issue of the FReM 5.4.24 financial statements of the charitable NDPB should normally be the same as the date of the Certificate and Report of the Comptroller and Auditor General. G1.2 Where the charitable NDPB's owners or others have the power to amend the FRS 21.17 financial statements after issue, has this fact been disclosed? G1.3 Where the charitable NDPB has received information after the balance sheet FRS 21.19 date about conditions that existed at the balance sheet date, have the disclosures that relate to those conditions been updated in the light of the new information? G1.4 Has the following information been disclosed for each material non-adjusting event after the balance sheet date: (a) the nature of the event? FRS 21.21 a) (b) an estimate of the financial effect or a statement that such an estimate FRS 21.21 b) cannot be made? Note: FRS 21 paragraph 22 lists examples of non-adjusting events after the FRS 21.22 balance sheet date that would generally result in disclosure. G1.5 Where subsidiary trading entities exist and provided that a liability for the gift SORP 141 (b) aid payment existed at the year end, has the amount of the liability been adjusted where calculations subsequent to the year end provide greater accuracy? G2 COMMITMENTS AND CONTINGENCIES Capital commitments G2.1 Where practicable, have the estimated amounts of future capital expenditure SI 2006/410 § 77 (1) SI 1996/189 Sch 1 (including irrecoverable VAT) been disclosed which are contracted for but not SSAP 5.6 provided? Commitments for grants payable and other charitable projects G2.2 Has the following information been disclosed in respect of commitments for SORP 326 - 328 grants payable and other charitable projects: (a) the reason for the commitments, giving separate disclosure for material SORP 328 projects? (b) the total amount of the commitments, including amounts already SORP 328 charged in the accounts? (c) the amount of commitments outstanding at the start of the year? SORP 328 (d) any amounts charged in the SOFA for the year? SORP 328 (e) any amounts released during the year due to a change in the value in SORP 328 the commitments? (f) the amount of commitments outstanding at the end of the year and an SORP 328 indication as to how much is payable within one year and over one year? Note: the note should cross refer, where appropriate, to notes detailing SORP 329 recognised liabilities and/or designated funds for the equivalent grants/projects. Private Finance Initiative commitments G2.3 To take account of the long term nature of most PFI contracts, and in FReM 2008/09 7.4.62 Technical note No.1 (revised) „How to addition to the disclosures for a lessee under a PFI contract set out in SSAP account for PFI transactions‟ 21 (see E12.18), has the following information for off balance sheet contracts and the service element of any on balance sheet contracts been disclosed: Not required by FReM 2009-10, but best practice per FReM 2008-09 (a) the nature of the contract or scheme? TTTN 5.21 (b) estimated capital value? TTTN 5.21 (c) contract start and end dates? TTTN 5.21 (d) details of prepayments and reversionary interests and how they are accounted for? (e) amount charged in respect of PFI transactions disclosed in the TTTN 5.19 operating cost statement (or the notes to it)? (f) note disclosure of the payments which the charitable NDPB is TTTN 5.19 committed to make, analysed between those in which the commitment expires: (i) within one year? (ii) in the second to fifth year inclusive? (iii) from the fifth year on in five-year bandings? (g) in cases where the estimated annual payment in future years is TTTN 5.20 expected to be materially different from those the charitable NDPB is committed to make during the next year, has the likely financial effect been disclosed? (h) where any transactions has resulted in the recognition of assets and TTTN 5.22 liabilities whose nature differs from that of items usually included in the relevant balance sheet heading, has this difference been explained in the financial statements? Partial transfer of an asset G2.4 Where an asset has been partially transferred, or transferred for part of its FRS 5.24 life, or for all of its life but with retention of significant but not all benefits or risks, and the gain or loss is uncertain, has the uncertainty been disclosed? Lease and hire purchase commitments G2.5 Have commitments under finance leases that have been entered into, but SSAP 21.54 where inception occurs after the balance sheet date, been disclosed? G2.6 Has the amount of operating lease rental the entity is committed to pay SSAP 21.56 during the next year, showing separately the amounts in respect of “land and buildings” and “other leases”, been analysed between those in which the commitment expires: (a) in under one year? (b) in the second to fifth years inclusive? (c) over five years? Financial commitments of subsidiaries G2.7 Have any financial commitments been disclosed separately for any SI 2008 410 para 73 subsidiary undertaking? Other financial commitments G2.8 Have details of other financial commitments not provided for but relevant to SI 2006/410 § 77 SORP 327 assessing the charitable NDPB's state of affairs, been given? Note: e.g. where contracts are non cancellable (or only cancellable at a significant cost) and the contract relates to something other than the routine steady state business of the charitable NDPB. G2.9 Have details of all rights and obligations, guarantees and commitments that FRS 5.94 SORP 336 are not recognised as assets or liabilities, but require disclosure to give a true and fair view, been disclosed? Secured charges and loan liabilities G2.10 Where any specific assets (whether land or other property) of the charitable NDPB are subject to a mortgage or charge given as security for a loan or other liability, has the following information been disclosed in the notes to the financial statements: (a) particulars of the assets which are subject to the mortgage or charge? SORP 349 (b) the amount of the loan or liability and its proportion to the value of the SORP 349 assets mortgaged or charged? G2.11 Have amounts, interest and repayment terms of all inter-fund loans (including SORP 350 any loans from permanent endowment and summarised, where necessary) been disclosed in the notes to the financial statements? G2.12 Have loans made to trading subsidiaries, the security provided, the interest SORP 350 payable and the repayment terms been disclosed as a separate item in the notes to the financial statements? SORP 340-348 Contingent liabilities and assets G2.13 Has the following information been disclosed for all contingent liabilities at FRS 12.91 SORP 345 the balance sheet date (except where the possibility of any transfer is extremely remote, or disclosure is not practicable): (a) a brief description of the nature of the contingent liability, including, as FRS 12.91 SORP 346 appropriate, its legal nature? SI 2006/410 § 77 (b) an estimate of its financial affect (measured in accordance with FRS 12.91 SORP 346 paragraphs 36-55 of FRS 12)? (c) an indication of the uncertainties relating to the amount or timing of any FRS 12.91 SORP 346 outflow? (d) the possibility of any reimbursement? FRS 12.91 (e) details of any valuable security provided by the charitable NDPB in SI 2008 410 61 connection with the liability? G2.14 Has additional information been given on contingent liabilities that are FReM 7.4.59 a) reportable to Parliament even though they fall outside the scope of FRS 12? G2.15 Where an inflow of economic benefits is probable, has a brief description of FRS 12.94 SORP 345 the nature of the contingent assets at the balance sheet date and, where practicable, an estimate of their financial effect (per FRS 12 36-55) been disclosed? G2.16 Where a liability has been accrued but there is still a contingent liability SORP 348 arising from the same set of circumstances, has the provision and the contingent liability been disclosed in the notes to the financial statements? DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref SECTION J: CONSOLIDATED ACCOUNTS – SUBSIDIARY and QUASI- SUBSIDIARY UNDERTAKINGS Note (1): this section assumes that there are no associated undertakings or joint ventures, or minority interests, and no changes in stake or composition of the group (i.e. that all entities within the group are 100% controlled by the parent charitable NDPB, and have been throughout the period). Note (2): where there are associated undertakings or joint ventures, complete Link to "Initial questions" Supplement H - see question IQ6 of "Initial Questions" to obtain this supplement. sheet J1 GENERAL J1.1 Do the consolidated accounts comply so far as practicable with the provisions of CA 2006 § 403 schedule 4A on the form and content of group accounts? J1.2 Have both group and parent entity balance sheets been presented in the consolidated accounts, and signed by the Accounting Officer and on behalf of the Trustees? J1.3 Do the notes to the balance sheet relate to both the group and the parent entity SORP 400 amounts? J1.4 Where specifically required, have parent entity SOFA and cash flow statements SORP 396-397 SORP 400 been presented in addition to the group SOFA and cash flow, and do the notes to those statements relate to both the group and the parent entity amounts? Note: although consolidated accounts must be prepared under accounting SORP 396-397 standards, in England and Wales, for those NDPBs covered by it, the Charities Act 1993 requires the individual charity‟s accounts to be filed with the Charity Commission. To meet these requirements, where the group and parent charity‟s accounts are included in the same set of consolidated accounts, as well as two balance sheets there should be two Statements of Financial Activities (one for the group and one for the parent). However, consolidated accounts are often filed with the Commission omitting the Statement of Financial Activities for the parent charity. The Commission is prepared to accept these accounts as long as gross income/turnover and results of the parent charity are clearly disclosed in the notes. The group accounts must still contain the entity balance sheet of the parent charity. The Commission retains the power to require the production and filing of any individual charity Statement of Financial Activities and similarly members of the public have a legal right to request this statement. J1.5 Have all subsidiaries and quasi-subsidiaries been consolidated except those CA 2006 § 405 FRS 2.25 which must be excluded from consolidation (see J1.11)? FRS 5.36 SORP 383 J1.6 Has the consolidation been carried out in accordance with FRS 2 on a line by SORP 393 line basis? J1.7 Have all items of incoming resources and resources expended been shown SORP 394 gross after the removal of intra-group transactions? J1.8 On consolidation, have similar items in the charitable NDPB and subsidiary been SORP 394-395 treated in same way? J1.9 Has a separate comment concerning the activities and performance of each of SORP 398 the charitable NDPB‟s material subsidiary undertakings been included in the Trustees‟ Annual Report? J1.10 Where consolidated accounts are prepared, has the method of consolidation, SORP 399 and which subsidiaries or associated entities are included and excluded from the consolidation, been stated in the policy notes? Note: where there are minority interests external to the group, similar details to SORP 402 those in SORP paragraph 401 should be provided relating to the minority interest held in the subsidiary undertakings, including any restrictions that may be placed on the group‟s activities. Where there are minority interests, auditors should also refer to FRS 2, paragraphs 35 to 38, and where there are changes in the parent‟s stake or in the composition of the group, to FRS 2 paragraphs 45 to 52. J1.11 Have subsidiaries or quasi-subsidiaries been excluded from consolidation where: (a) severe long-term restrictions substantially hinder the exercise of the parent SORP 383 (a) FRS 2.25 (a) entity‟s rights over the subsidiary‟s assets or management? CA 2006 § 405 (b) subsidiaries and quasi-subsidiaries held exclusively for resale and which SORP 383 (a) FRS 2.25 (b) have not previously been consolidated? CA 2006 § 405 Note: the SORP states that it is unlikely that these exclusions will generally SORP 384 apply to a charitable group. (c) the gross income, after consolidation adjustments, of the group in the SORP 383 (b) accounting period is no more than the threshold for a statutory charity audit? (d) the results of the subsidiary undertaking(s) are not material to the group? SORP 383 (c) (e) the subsidiary is a charity with objects substantially different from the parent SORP 386 charitable NDPB? (f) the subsidiary is not a company and, by virtue of being a special trust or a SORP 383 (d) charity subject to a uniting direction under § 96 (5) or (6) of the Charities Act 1993, has had its accounts aggregated with that of the parent charitable NDPB? Note: the difference between profit and not-for-profit undertakings is not SORP 385 sufficient of itself to justify non-consolidation. However, a subsidiary that is a registered company which is insolvent and is being wound-up can be excluded from consolidation. J2 ALL SUBSIDIARIES AND QUASI-SUBSIDIARIES J2.1 Has the aggregate amount of the total investment of the charitable NDPB in its SORP 401 subsidiary undertakings been stated in the notes to the financial statements? J2.2 Has the following information been disclosed in respect of each subsidiary FRS 2.20 - 2.38 undertaking (defined in CA 2006 § 1162 and FRS 2 14) of the charitable NDPB: SI 1996/189 Sch 3 (a) the aggregate amount of its assets, liabilities and funds as at the end of its SI 2008/410 Sch 4 (2) SORP 401 (d) relevant financial year? (b) its financial result for the year? SI 2008/410 Sch 4 (2) SORP 401 (e) Note: the above two disclosures are not required where the charitable NDPB‟s SI 2008/410 Sch 4 (2) investment in the subsidiary is included in the its accounts under the equity method. (c) its name? SI 2008/410 Sch 4 (1) SORP 401 (a) (d) its country of incorporation, if incorporated outside Great Britain? SI 2008/410 Sch 4 (1) (e) its principal place of business, if unincorporated? SI 2008/410 Sch 4 (1) (f) the identity of each class of shares held and the proportion of the nominal SORP 401 (b) value of that class (shown separately for any share of the undertaking held by the parent and any share held by the group)? (g) whether the subsidiary is included in its parent‟s consolidated accounts SORP 404 and, where not, the reasons for excluding it from consolidation? (h) the reason it is a subsidiary (where other than because the investing entity SORP 401 (c) holds a majority of the voting rights) and how its activities relate to those of the charitable NDPB? (i) (for each principal subsidiary) the nature of the business? FRS 2.33 (j) (for each principal subsidiary) the proportion of voting rights held by the FRS 2.33 parent and its subsidiary undertakings? J2.3 Where an undertaking is only a subsidiary by virtue of actual exercise of FRS 2.34 dominant influence, has the basis of that influence been disclosed? J2.4 Has the number, description and amount of any shares in the parent held by or SI 2008/410 Sch 4 (3) on behalf of the subsidiaries been disclosed? DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref Comments/links SECTION L: GROUP ACCOUNTS NOT REQUIRED, OR SUBSIDIARIES AND/OR ASSOCIATES EXCLUDED FROM THE GROUP ACCOUNTS L1 WHERE THE ENTITY IS NOT REQUIRED TO PREPARE GROUP Link to "Initial Questions" sheet Supplement H Note: this link only works if ACCOUNTS "Supplement H" sheet has been L1.1 activated in the "Initial questions" Where the charitable NDPB has a subsidiary but is not required to prepare FRS 2 22 group accounts (i.e. is an exempt parent undertaking under one of the criteria in FRS2 21): (a) has the reason for this been disclosed, together with a statement that SI 2008/410 Sch 4 § 10 the charitable NDPB‟s financial statements present information about it as an individual undertaking and not about its group? (b) have the following disclosures been made in respect of each FRS 2 22 subsidiary: (i) the name of the undertaking? (ii) its country of incorporation, if incorporated outside Great Britain? (iii) its principal place of business, if unincorporated? (iv) the identity of each class of shares held and the proportion of the nominal value of that class (shown separately for any share of the undertaking held by the parent and any share held by the group)? (v) aggregate capital and reserves of the undertaking at the end of its relevant financial year? (vi) its result for that year? L1.2 Where the reason that group accounts are not produced is that all the FRS 5.35 charitable NDPB‟s subsidiary or quasi-subsidiary undertakings are excluded due to the either severe long term restrictions (subsidiaries only) or held exclusively with a view to resale (subsidiaries and quasi-subsidiaries) or the undertakings' activities are so different that inclusion would be incompatible with a true and fair view, has this fact been disclosed? Note: quasi-subsidiaries are not exempted from consolidation purely because of their classification as quasi-subsidiaries. L1.3 Where the charitable NDPB has an associate or joint venture but is not FRS 9.48 required to prepare group accounts because it has no subsidiaries, has a separate set of financial statements, or additional information in its own financial statements, for associates or joint ventures been included in the financial statements? L2 WHERE GROUP ACCOUNTS ARE PREPARED BUT SUBSIDIARIES AND/OR QUASI-SUBSIDIARIES ARE EXCLUDED FROM CONSOLIDATION L2.1 Have any subsidiaries or quasi-subsidiaries, excluded from consolidation due FRS 2.27 and 2.25 FRS 5.36 and 5.101 to severe long term restrictions, been accounted for as fixed assets in the consolidated accounts or, where the parent still exercises significant influence, been equity accounted? L2.2 Have any subsidiaries or quasi-subsidiaries, excluded from consolidation FRS 2.29 and 2.25 FRS 5.36 because they are held exclusively with a view to resale and which have not previously been consolidated, been recorded in the consolidated accounts as a current asset? L2.3 Have any subsidiaries or quasi-subsidiaries, excluded from consolidation FRS 2.30, 2.31 and 2.25 FRS 5.36 because of dissimilar activities (where inclusion would be inconsistent with the obligation to give a true and fair view), been equity accounted? L2.4 Has the following been disclosed for all subsidiaries and quasi-subsidiaries excluded from consolidation: (a) the reason for the exclusion? FRS 2.26 (b) particulars of the balances between the excluded undertaking and the FRS 2.31 (a) and 2.32 rest of the group? (c) the nature and extent of transactions of the excluded undertaking and FRS 2.31 (b) and 2.32 the rest of the group? (d) separate accounts, for excluded undertakings, attached to the FRS 2.31 (d) consolidated accounts? DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref SECTION P: LOANS, GUARANTEES, SECURITY AND MATERIAL INTEREST TRANSACTIONS #REF! Comments/links DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref Comments/links SECTION Q: RELATED PARTY DISCLOSURES Note (4): the SORP defines related parties in the context of charities and SORP GL 50 auditors are advised to refer to this for further guidance. From the definition, the main related parties likely to be relevant to charitable NDPBs are: (a) the chief executive (CE); (b) the Trustees; (c) any member of the family or household of the CE or any Trustee; (d) any officer, agent or employee of the charitable NDPB having authority or responsibility for directing or controlling the major activities or resources of the charitable NDPB; (e) any business partner of the CE or any Trustee, or any company in which the CE or any Trustee has a greater than 20% interest; (f) any charitable NDPB subject to common control (one in which the reporting charitable NDPB‟s Trustees form a majority of the trustees; or one where the body or bodies entitled to appoint a majority of the reporting charitable NDPB‟s Trustees are similarly entitled to appoint a majority of the trustees); (g) any parent, subsidiary or associated undertaking or joint venture (but FRS 8 paragraph 3 exempts disclosure of transactions and balances with such bodies within the group accounts). Note (2): charitable NDPBs may apply the general principle of exemption FReM 5.4.62 b) from related party disclosure in respect of trustees acting as agents of the charity, in accordance with the parameters contained within the SORP. Q1.1 Have all controlling related party relationships been disclosed, irrespective of SORP 221-229 whether transactions have taken place, stating: FRS 8.5 (a) where the names are known, the name of the controlling related party and if different the name of ultimate controlling party? FRS 8.5 (b) where the names are unknown, that the name of the controlling related party and/or the name of ultimate controlling party is not known? Q1.2 Have the following been disclosed where the charitable NDPB has FReM 5.4.62 c) FRS 8.6 undertaken any material transactions with a related party (irrespective of whether a price is charged): (a) the names of the related parties? SORP 227 (a) (b) a description of the relationship between the parties? SORP 227 (b) (c) a description of the transaction(s)? SORP 227 (c) (d) the amounts involved? SORP 227 (d) (e) any other elements of the transactions necessary for an understanding SORP 227 (g) of the impact on the accounts? (f) the amounts due to or from related parties at the balance sheet date SORP 227 (e) and provisions for doubtful debts due from such parties at that date? (g) amounts written off in the period in respect of debts due to or from SORP 227 (f) related parties? Note: transactions with related parties may be disclosed on an aggregate SORP 228 (a) and (b) basis (aggregation of similar transactions by type of related party) unless disclosure of an individual transaction, or connected transactions, is necessary for an understanding of the impact of the transactions on the accounts of the reporting entity or is required by law. DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref Comments/links SECTION R: SUMMARISED FINANCIAL STATEMENTS Note (1): whereas some charities produce a “glossy” annual report or annual review, which will normally include "summary" financial statements, in addition to the statutory Annual Report and Accounts, charitable NDPBs are now required to prepare combined annual reports and (full) accounts and thus some charitable NDPBs may be less inclined to prepare summary statements. Note (2) : SORP 372 (Table 10) clearly sets out the difference between SORP 372 "Summarised Financial Statements" (based on full accounts) and "Summary Financial Information" (drawing information from particular aspects only of the full accounts). Note (3): the SORP‟s guidance on summary financial statements is adapted SORP 373 from the regulations governing summary financial statements of listed companies (section 251 Companies Act 1985, SI1995/2092). The SORP requires that the auditors should issue a statement on the summary financial statements (where the full accounts have been audited). Since the content of the summary financial statements is modelled on the Companies Act requirements, it is appropriate for the auditor‟s statement to similarly be modelled on the equivalent private sector requirement, being Bulletin 1999/06 issued by the Auditing Practices Board. R1 ANNUAL REPORT/ANNUAL REVIEW R1.1Are there any apparent misstatements in the Trustees' Annual Report or Annual Review? Note: APB Bulletin 1999/06 requires auditors to “read” the Annual Report or Annual Review and any other information contained within the same document as the summarised financial statements. (“Reading” in this sense is a less stringent test than “reviewing” as applied to corporate governance statements or “auditing”.) If, as a result of reading the material, auditors become aware of apparent misstatements in the material or inconsistencies with the summarised financial statements, they should seek to resolve them with management. R2 TRUSTEES’ STATEMENT R2.1 Are the summarised financial statements accompanied by a statement, signed on behalf of the trustees, indicating: (a) that they are not the statutory accounts but a summary of the SOFA SORP 377 (a) and balance sheet? Note: this should normally be expanded to form a “health warning” that the summarised financial statements may not contain sufficient information to allow a full understanding of the charitable NDPB‟s finances. (b) whether or not the statutory accounts have yet been audited (i.e. the SORP 377 (b) audit certificate signed)? (c) where the audit has been completed, whether or not the auditor‟s report SORP 377 (c) on the statutory accounts was qualified or unqualified? (d) where the auditor‟s report on the statutory accounts is qualified, or SORP 377 (d) contains an explanatory paragraph or emphasis of matter, that the auditor‟s report is set out in full in the summarised financial statements together with any further material needed to understand the qualification? (e) where accounts are produced only for a branch of the charitable NDPB, SORP 377 (e) that the summarised financial statements are for the branch only and that they are an extract from the full accounts of the (named) reporting charitable NDPB? (f) how the statutory accounts can be obtained? SORP 377 (f) (g) the date on which the statutory accounts were approved by the SORP 377 (g) trustees? (h) whether or not the statutory accounts have been filed with the Charity SORP 377 (h) Commissioners? R2.2 Where the full accounts have been externally scrutinised, has a statement SORP 378 from the external scrutineer been attached, giving an opinion as to whether or not the summarised financial statements are consistent with the full annual accounts? R3 SUMMARY FINANCIAL INFORMATION R3.1 Has any other summary financial information been accompanied by a statement on behalf of the Trustees and Accounting Officer setting out: (a) the purpose of the information? SORP 379 (a) (b) whether or not the summary financial information is from the full SORP 379 (b) accounts? (c) whether or not these financial statements have been audited, SORP 379 (c) independently examined or subject to a reporting accountant's report? (d) details of how the full annual accounts, Trustees' report and external SORP 379 (d) scrutiny report (as appropriate) can be obtained? DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref Comments/links SUPPLEMENT C2: SEGMENTAL ANALYSIS and ACQUISITIONS and DISCONTINUED OPERATIONS SC2.1 SEGMENTAL REPORTING: SSAP 25 (where appropriate) FReM 5.4.30 Note: SSAP 25 requires the disclosure by class of business and by geographical segment of turnover, segment result and segment net assets. The turnover disclosure is required by all companies otherwise the disclosure is mandatory only for PLCs, banking and insurance companies and those over ten times the threshold for medium sized companies. Therefore SSAP 25 will only be applicable to the largest charities. The disclosure requirements in the SORP for details of activities by function meets the spirit of SSAP 25 for turnover by class of activity. The disclosure by geographical region and segment net assets would be additional. SC2.1.1 Where the charitable NDPB has two or more classes of business (for SI 2008/410 § 68 SSAP 25.9 - 25.10 and example where a service comprises more than one activity) which differ 25.11 - 25.13 substantially from each other, has the following information been disclosed for each segment that is significant to the charitable NDPB as a whole: (a) a definition of each class of business? SSAP 25.17 and 25.34 (b) turnover, distinguishing between that derived from external sources SSAP 25.34 and that from other segments? (c) the result before taxation, minority interests and extraordinary items? SSAP 25.34 (d) net assets? SSAP 25.34 SC2.1.2 Where the charitable NDPB operates in two or more geographical segments, SI 2008/410 § 68 (2) SSAP 25.9 - 25.10 and which differ substantially from each other, has the following information been 25.14 - 25.16 disclosed for each segment that is significant to the charitable NDPB as a whole: (a) a definition of each class of business? SSAP 25.17 and 25.34 (b) turnover, distinguishing between that derived from external sources SI 2008/410 § 68(2) SSAP 25.34 and that from other segments? (c) the result before taxation, minority interests and extraordinary items? SSAP 25.34 (d) net assets? SSAP 25.34 SC2.1.3 Where segments have been re-defined, or changes made to the accounting SSAP 25.10, 25.29 and 25.39 policies for reporting segmental information, has the nature, reason and effect of the change been disclosed, along with restated figures for the previous period? SC2.1.4 Where the total of amounts disclosed by segment does not agree with the SSAP 25.37 related total in the financial statements, has a reconciliation between the two amounts been properly identified and explained? SC2.1.5 Where an acquisition, sale or termination has a material impact on a major FRS 3.15 and 3.53 business segment, has the impact been disclosed and explained? SC2.1.6 Where there is a material difference between disclosing sales by origin and SSAP 25.18 and 25.34 by destination, have both been disclosed? SC2.1.7 SSAP 25.18 and 25.34 Where there is no material difference between disclosing sales by origin and by destination, has a statement to that effect been made? SC2.1.8 Where associated undertakings form at least 20% of the charitable NDPB‟s SSAP 25.36 total results or 20% of its total net assets, has the charitable NDPB‟s share of the associates‟ results and net assets been disclosed? SC2.2 FEES AND CHARGES INFORMATION SC2.2.1 Where the charitable NDPB provides one or more services for which a fee is FReM 5.4.30 charged, has an analysis of each service (where the full cost is £1m or more, or where less than £1m, where the amount of the income and the full cost of the service are material) been provided in the financial statements? SC2.2.2 Has the following information been shown for each service in the analysis in FReM 5.4.30 SC2.2.1 : (a) financial objective and outturn? (b) full cost? (c) income? (d) surplus or deficit? (e) performance against the financial objective? DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref SUPPLEMENT E2: INTANGIBLE FIXED ASSETS SE2.1 Has the following information been disclosed for each class of intangible FRS 10.53 fixed asset capitalised on the balance sheet: (a) cost or revalued amount at the beginning of the financial period and at the balance sheet date? (b) the cumulative amount of provisions for amortisation or impairment at the beginning of the financial period and at the balance sheet date? (c) a reconciliation of the movements, separately disclosing additions, disposals, revaluations, transfers, amortisation, impairment losses, reversals of past impairment losses in the period? (d) the net carrying amount at the balance sheet date? Note: corresponding amounts are not required. SE2.2 Have intangible fixed assets been disclosed using the following headings FReM 2008/09 7.4.42 (where material): Not required by FReM 2009-10, but best practice per FReM 2008-09 (a) software licences? (b) development expenditure? (c) licences, trademarks and artistic originals? (d) patents? (e) goodwill? SE2.3 Where an intangible fixed asset has a readily ascertainable market value, FRS 10.61 has it been revalued, and has the following information been disclosed in the notes: (a) the year in which the assets were valued, the values and the bases of valuation? (b) the name and qualifications of the valuer, where valued in year? FRS 10.62 SE2.4 Have bought-in software licences been accounted for as intangible assets? FRS 10.2 Note: in-house developed software should be accounted for as a tangible fixed asset. SE2.5 Has development expenditure where: FReM 5.3.8 a) SSAP 13.25 (a) there is a clearly defined project; and (b) the related expenditure is separately identifiable; and (c) the outcome of the project has been assessed with reasonable certainty as to its technical feasibility and it resulting in a product or service that will eventually be brought into use; and (d) adequate resources exist, or are reasonably expected to be available, to enable the project to be completed; and (e) (commercial products only) future revenue from the product or service is reasonably expected to exceed the aggregate of the development costs, plus future development costs, plus production, selling and administration costs been capitalised? Note (1): internal costs, including the charge for cost of capital, should not FReM 2008/09 5.3.8 b) be capitalised if they relate to activities that can only be carried out by in- house staff. Not required by FReM 2009-10, but best practice per FReM 2008-09 Note (2): fulfilment of the conditions should be reviewed annually. SSAP 13.15 SE2.6 Has development expenditure where the conditions listed in SE2.5 have not FReM 5.3.8 a) SSAP 13.25 all been met, been written off? SE2.7 For capitalised development costs, have the following been disclosed: SI 2008/410 § 41(2) (a) the period of write off? SI 2008/410 § 41(2) (b) the reason for capitalisation? SI 2008/410 § 41(2) Other intangibles SE2.8 Has the aggregate amount of concessions, patents, licences, trade marks SI 2008/410 Format and similar rights and assets been disclosed? SE2.9 Have the following types of intangible assets been capitalised: (a) intangible assets (e.g. trade marks) purchased separately from a FRS 10.9 business (which should be initially capitalised at cost)? (b) internally developed intangible assets that have a readily ascertainable FRS 10.14 market value, in an active market (which should be capitalised at market value)? SE2.10 Has the method used to value intangible assets been described? FRS 10.52 SE2.11 Have the methods and periods of amortisation of goodwill and intangible FRS 10.55 assets, and the reasons for choosing those periods, been disclosed? SE2.12 Where an amortisation period is shortened or extended following a review of FRS 10.56 the remaining useful economic lives of goodwill and intangible assets, has the reason and the effect, where material, been disclosed in the year of change? SE2.13 Where there has been a change from non-amortisation of goodwill or UITF 27 intangible assets (on the grounds that the life of a asset is indefinite) to amortisation over a period of 20 years or less, has the carrying value of goodwill and intangible assets been amortised over the revised remaining useful economic life? SE2.14 Where there has been a change in the amortisation method used, has the FRS 10.57 reason and effect of the change, where material, been disclosed in the year of change? Note: Treasury should be consulted prior to introducing such a change to assess whether it will have a significant impact on expenditure control. SE2.15 Where goodwill or an intangible asset is amortised over a period that FRS 10.58 exceeds 20 years, or is not amortised, have the grounds for rebutting the 20 year presumption been disclosed? Comments/links DISCLOSURE GUIDE for charitable NDPBs for year ending 31 March 2011 Apply Response Ref SUPPLEMENT H: INTERESTS IN ASSOCIATED UNDERTAKINGS AND JOINT VENTURES SORP 417 Note (1): level of disclosure - FRS9 requires minimum disclosures for all associates and joint ventures, and more detailed disclosure for those associates and joint ventures that individually represent more than 15% and 25% of key values for the group as a whole. However, the SORP (paragraph 417) requires detailed disclosure for all associates and joint ventures. Note (2): treatment of joint ventures - the treatment of the incoming resources of joint ventures in the consolidated SOFA that is stipulated by the SORP is likely to be difficult to achieve in a way that is not confusing to users of the accounts. Care should be taken to ensure that the overriding requirement to show a true and fair view is still met. Note (3): consolidated accounts not prepared - where the entity does not prepare consolidated accounts (for legitimate reasons), go to H3. H1 RECOGNITION IN THE CONSOLIDATED ACCOUNTS Associates Note: an associate is defined as an entity, other than a subsidiary, in which the investing entity holds a participating interest, and exercises significant influence over the entity‟s operating and financial policies. A beneficial, long term equity or voting interest of 20% or more is presumed to be a participating interest and to confer significant influence, unless the contrary is shown. H1.1 Where a recipient of a grant or programme related investments invites the SORP 410 charitable NDPB to provide or nominate a trustee, has consideration been given to whether an associate has been created? Note: where the recipient charity operates with a small trustee body, this might be construed as creating an associate. An associate will be created if the nomination or appointment is used in conjunction with a formal or informal agreement to exercise significant influence through direct involvement in setting the recipient charity‟s operating and financial polices. Where the charity trustee appointment is simply used to provide advice or expertise to the recipient charity whilst allowing the charity to adopt its own policies and strategies then an associate relationship is unlikely to be created. H1.2 Have all associates been included in the consolidated accounts under the net FRS 9.13 and 9.26 - 9.30 SORP 413 equity method? H1.3 In the consolidated SOFA, has the group‟s net interest in the results of associates SORP 413 (which may be combined with the share of the results of joint ventures) been included as a separate line after the line “Net Incoming Resources/(Resources Expended) before transfers” row? H1.4 In the consolidated balance sheet, has the group‟s net interest in associates (i.e. SORP 413 the share of funds carried forward) been included as a separate line within investment assets? H1.5 Where the charity‟s rights to the associate‟s assets are severely limited (e.g. SORP 413 because the majority prohibit any dividend distribution), has this been reflected in the valuation? H1.6 Where there is unamortised goodwill on acquisition, has this been separately FRS 9.29 disclosed in the notes? Joint Ventures Note: a joint venture is an entity in which the investing entity holds a long term interest and which is jointly controlled, so that the investing entity has a veto on major financial and operating policy decisions. H1.7 Have all joint ventures been included in the consolidated accounts under the SORP 414 gross equity method? H1.8 In particular, in the consolidated SOFA: (a) has the group's share of the gross incoming resources from joint ventures SORP 414 been included in Incoming Resources on a line-by-line basis? (b) has the group‟s share of total incoming resources arising from joint ventures SORP 414 been deducted before the Total Incoming Resources sub-total? (c) has the group‟s net interest in the results of joint ventures (which may be SORP 414 combined with the share of the results of associates) been included as a separate line after the line “Net Incoming Resources/Resources Expended”? H1.9 In the consolidated balance sheet, has the group's share of the gross assets and SORP 414 gross liabilities of joint ventures been shown in a linked presentation within investment assets? Gains and losses H1.10 Where there are gains and losses on investments and unrealised gains on other SORP 415 fixed assets, has the net share relating to associates been shown on a separate row, with the gross share relating to joint ventures being shown either on a separate row or combined with the appropriate lines on the SOFA? Cash flow disclosures H1.11 Have the following been disclosed in the consolidated cash flow: FRS 9.30 (a) dividends received from associates and joint ventures as a separate item between operating activities and returns on investments and servicing of finance? (b) any other cash flows between the investor and its associates, under the appropriate headings? Joint Arrangements Note: if the body has entered a commercial arrangement with another body or FRS 9.18 and 9.19 bodies, but the arrangement does not create another legal entity, the arrangement should not be equity accounted. H1.12 For any joint arrangements that is not an entity (JANE), has the charitable FRS 9.8 - 9.9 and 9.18 SORP 416 NDPB‟s share of assets, liabilities and cash flows under the arrangement been included in its financial statements in accordance with the terms of the agreement governing the arrangement? H1.13 Where there is a joint arrangement, has the charitable NDPB‟s gross share of the SORP 416 incoming resources and resources expended and the assets and liabilities been included in the financial statements in the same way as for a branch (see SORP paragraphs 77 to 81)? H1.14 Where under the arrangement the charitable NDPB is jointly and severally liable SORP 416 for an obligation, has the part of the obligation for which it is responsible been accrued, and the part of the obligation which is expected to be met by the other parties treated as a contingent liability? H1.15 For joint arrangements, have appropriate details of the charitable NDPB's SORP 418 commitments in the arrangement been disclosed in the notes to the financial statements? H2 DISCLOSURE H2.1 Has the following information been disclosed in respect of each and every FRS 9.52 SORP 417 associated undertaking and joint venture (defined in SI 2008/410 Sch 6 § 18 & 19 and FRS 9 preamble) of the charitable NDPB: (a) its name? SORP 417 (a) SI 2008/410 Sch 4 18 & 19 (b) its country of incorporation, if incorporated outside Great Britain? SI 2008/410 Sch 4 18 & 19 (c) its principal place of business, if unincorporated? SI 2008/410 Sch 4 18 & 19 (d) the identity of each class of shares held, including any special rights or SORP 417 (b) SI 2008/410 Sch 4 19 constraints, and the proportion of the nominal value of that class (shown FRS 9.52 (a) separately for any share of the undertaking held by the parent and any share held by the group)? (e) where the charitable NDPB's participating interest is conferred other than SORP 417 (b) FRS 9.13 through the holding of share capital in the associate or joint venture, the basis of that participating interest? (f) the accounting period or date of the financial statements used, where they FRS 9.52 (b) differ from those of the investing group? (g) an indication of the nature of its business? SORP 417 (c) (h) particulars of any qualifications in the audit report on the associate or joint SORP 417 (e) venture‟s accounts? (i) the charitable NDPB‟s interest in the results and position, showing separately SORP 417 (d) its share of: (i) gross incoming resources by type? SORP 417 (d) (i) (ii) costs of generating funds? SORP 417 (d) (ii) (iii) expenditure on charitable activities? SORP 417 (d) (iii) (iv) expenditure on governance? SORP 417 (d) (iv) (v) exceptional items? FRS 9.27 (vI) interest payable? FRS 9.27 (vii) net incoming/outgoing resources (showing before tax, tax, and after tax, SORP 417 (v) where applicable)? (viii) other gains and losses? SORP 417 (vi) (ix) fixed assets? SORP 417 (vii) (x) current assets? SORP 417 (viii) (xi) liabilities due within one year? SORP 417 (ix) (xii) liabilities due after more than one year? SORP 417 (x) (xiii) funds? SORP 417 (xi) Comments/links