Notes to the Financial Statements
1. Principal Accounting Policies
Legal Status
Turnover and Revenue Recognition
The association is registered under the Co-operative and
Community Benefit Societies Act 2014 and is a registered
housing provider.
Turnover represents rental and service charge income
receivable, fees receivable, revenue grants from the Homes
and Communities Agency and other public authorities and sale
proceeds from first tranche shared ownership sales. Income is
recognised from the point when properties are first let, net of
any voids. Income from first and subsequent tranches sales,
and properties built for sale is recognised at the point of legal
completion of the sale. Revenue grants are receivable when the
conditions for receipt of agreed grant funding have been met.
Charges for care and support services funded are recognised as
they fall due under contractual arrangements.
Basis of Accounting
The financial statements have been prepared in accordance
with applicable UK Generally Accepted Accounting Practice (UK
GAAP), including Financial Reporting Standard 102 (FRS102)
and the Housing SORP 2014: Statement of Recommended
Practice for Registered Social Housing Providers and comply
with the Accounting Direction for Private Registered Providers of
Social Housing 2015. This is the first year in which the financial
statements have been prepared under FRS102. Refer to note 33
for an explanation of the transition.
Public Benefit Entity
The association is a Public Benefit Entity, as defined within
FRS102 as “an entity whose primary objective is to provide goods
or services for the general public, community or social benefit and
where any equity is provided with a view to supporting the entity’s
primary objectives rather than with a view to providing a financial
return to equity providers, shareholders or members.
Going Concern
The association’s business activities, its current financial position
and factors likely to affect its future development are set out
within the Board Report and Operating and Financial Review.
The association has in place long-term debt facilities which
provide adequate resources to finance committed reinvestment
and development programmes, along with the association’s
day to day operations. The association also has a long-term
business plan which shows that it is able to service these debt
facilities whilst continuing to comply with lenders’ covenants. The
association maintains sufficient liquidity to meet ongoing cash
flow requirements.
On this basis, the board has a reasonable expectation that the
association has adequate resources to continue in operational
existence for the foreseeable future, being a period of at least
twelve months after the date on which the report and financial
statements are signed. For this reason, it continues to adopt the
going concern basis in the financial statements.
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Accord Group
Value Added Tax
The Association is Value Added Tax (VAT) registered under a
group registration. It is able to recover part of the VAT it incurs on
expenditure, using a partial recovery calculation mechanism. The
financial statements include VAT to the extent that it is suffered
by the association and is not recoverable from HM Revenue and
Customs. The balance of VAT payable at the year-end is included
as a current liability in the accounts of the parent entity, Accord
Housing Association Limited.
Taxation
Current tax is recognised for the amount of income tax payable
in respect to the taxable surplus for the current or past reporting
periods using the tax rates and laws that have been enacted or
substantively enacted by the reporting date.
Pension costs
The Association primarily operates a defined contribution pension
scheme, the costs of which are written off to the Income &
Expenditure account in the period in which they are incurred.
There are a limited number of employees who participate in
the Social Housing Pension Scheme (SHPS), a multi employer
defined benefit scheme to which the Association contributes. It
has not been possible to identify the share of underlying assets
and liabilities belonging to individual participating employers.
The charge to the statement of comprehensive income
represents the employer contributions payable to the scheme
for the accounting period.