Financial Statements 2018 financial statement- joomag | Page 46

Recycled Capital Grant Fund Grants repayable on property disposals are calculated in accordance with relevant Homes England procedures and included within a Recycled Capital Grant Fund. Interest is credited to the fund and calculated on a daily basis with the interest rate being determined by the level of total deposits. The fund can be used in the same manner as a new project funded with Social Housing Grant with certain permitted uses. It is intended to use the fund in the provision of either new social housing for rent and/or housing for sale on shared ownership terms or to supplement the major repair programme. Grants are repayable in certain specific circumstances including where the Homes England concludes that the Association is unlikely to use the fund for a permitted purpose within three years. The fund is included within long term creditors. Disposal Proceeds Fund Net proceeds from the disposal of property under voluntary purchase grant and statutory right to acquire legislation and regulations are included within a disposal proceeds fund. Interest is credited to the fund and calculated on a daily basis with the interest rate being determined by the level of total deposits. The fund can be applied for specific purposes ranging from acquisition of dwellings for letting, to repairs or improvement of vacant dwellings or buildings otherwise subject to demolition. The fund may be repayable at the discretion of the Homes England, in certain specific circumstances. The fund is included in long term creditors. Other long term creditors Other long term creditors include the costs of arranging long term funding. These amounts are amortised over the period of the underlying financial instrument. Loan termination costs are charged to the Statement of Comprehensive Income in the year in which they are incurred. Provisions for liabilities Provisions are recognised when: a) There is a present obligation as a result of a past event; b) It is probable the Association will be required to settle the obligation; and c) A reliable estimate of the obligation can be made. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value using a pre-tax discount rate. The unwinding of the discount is recognised as a finance cost in the Statement of Comprehensi