33. Transition to FRS102 - Group
The Group has adopted FRS102 for the year ended 31 March
2016 and has restated the comparative prior period amounts.
Changes for FRS102 adoption
SHPS Pension
Under section 28 the Group is now required to recognise the net
present value of any contractual agreements to make additional
payments for a past deficit. Using a discount rate of 2.06%, this
has resulted in a liability of £9,326k being recognised as a liability
in the opening reserves
Holiday pay accrual
An accrual is now made for entitlement to holiday at the year end
which has not been taken by employees. This has been calculated
based on payroll records and totalled £371k as a liability in
opening reserves.
Financial instruments
Management have reviewed financial instruments held as part of
the process of transition to FRS102 and have concluded that it is
appropriate to continue to classify all financial instruments as basic
under FRS102
Goodwill
Transition relief has been applied for any business combinations
entered into before the transition date of 1 April 2014. However, in
respect of the acquisition of Domus Healthcare Group in August
2014, an assessment has been made of the intangible assets
acquired. As a result the whole amount associated with goodwill
has been reclassified to intangible assets and the useful economic
lives of the underlying contracts is considered to be 20 years. This
reclassification has had no impact on opening reserves.
Grant accounting
Grants were previously netted off the cost of the related asset.
Under FRS102, government grants must be accounted for under
the accruals model or the performance model. As the association
accounts for its properties at cost, it has adopted the accruals
model for government grants, as required by SORP 2014. Nongovernment grants are accounted for under the performance
model. Under the accruals model, the government grants have
been allocated to the related assets and amortised over the useful
economic life of those assets. The unamortised amount is held
within deferred income, split between less than one year and
more than one year. The amount of amortised grant that has been
recognised in opening reserves is £25,557k.
Restated consolidated statement of financial position
Original reserves
Holiday pay accrual
SHPS pension
Government grant amortised
Tangible fixed assets
31 March 2015
31 March 2014
£000 £000
120,040
84,660
-
(371)
386
(9,326)
2,421
25,557
(1,711)
(18,540)
121,136 81,980
Restated surplus or deficit for the year ended 31 March 2015
31 March 2015
£000
Original profit on ordinary activities before tax
38,060
Amortisation of Government grant
2,421
Movement in depreciation charge
(1,745)
Pension contributions paid
571
Movement in depreciation eliminated on disposal
123
Amortised grant released on disposal
(89)
Unwinding of defined benefit pension charge
(185)
39,156
106
Accord Group