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 .
Contributions payable by the association to SHPS under the terms of its funding agreement for past service deficits are recognised as a liability within other provisions in the association ’ s financial statements , in accordance with the requirements of FRS 102 .
Sale of housing properties Where properties built for sale are disposed of during the year , the disposal proceeds are included in turnover , and the attributable costs included in cost of sales . The surplus or deficit on disposal of housing properties held as fixed assets , including second or subsequent tranches of shared ownership properties , is accounted for in the statement of comprehensive income . Where any Social Housing Grant ( SHG ) is to be recycled or repaid is less than the SHG relating to the disposal , the difference is treated as abated SHG and included as a component of the surplus or deficit on disposal .
Housing properties , impairment and property improvements Housing properties are properties held for the provision of social housing or to otherwise provide social benefit . Housing properties are principally properties available for rent and are stated at cost less accumulated depreciation and impairment losses . The cost of such properties include :
n Costs of acquisition , including stamp duty n Construction costs n Cost of capital employed during the development period n Directly attributable administration costs
Directly attributable administration costs are the labour costs arising from acquisition or construction , and the incremental costs which would have been avoided only if the property had not been constructed or acquired . Works to existing properties which replace a component that has been treated separately for depreciation purposes , along with those works that result in an increase in net rental income over the lives of the properties , thereby enhancing the economic benefits of the assets , are capitalised as improvements . which comprise its housing properties , and charges depreciation , so as to write-down the cost of each component on a straight line basis over its useful economic life .
Management reviews its estimate of the useful lives of depreciable assets at each reporting date based on the expected utility of the assets . Uncertainties in these estimates relate to changes to decent homes standards which may require more frequent replacement of key components . Accumulated depreciation as at 31 March 2017 was £ 74.7m .
The estimated useful economic life for each component is as follows :
Building Kitchen Bathroom Boiler & central heating Windows and doors Lifts ( where applicable )
Freehold land is not depreciated .
125 years 20 years 30 years 20 years 35 years 30 years
Leasehold properties are amortised over the life of the lease or the useful economic life , whichever is the shorter .
The association reviews its properties for indicators of impairment on an annual basis . Where such indicators are identified , an assessment for impairment is undertaken comparing the schemes carrying value to its recoverable amount . Where the carrying value is deemed to exceed the recoverable amount , the scheme is written down to its recoverable amount . The resulting impairment loss is recognised as operating expenditure .
Properties for sale Expenditure on shared ownership properties is split proportionally between current and fixed assets based on the element relating to first tranche sales . The first tranche proportion is classed as a current asset and related sales proceeds are included in turnover , and the remaining element is classed as a fixed asset and is included in housing properties at cost , less any provision of depreciation or impairment .
The association separately identifies the major components
58 Accord Housing Association