Reconciliation of opening and closing provisions
2018
2017
£’000
£’000
Provision at start of period
8,079
8,399
Unwinding of the discount factor (interest expense)
99
430
Deficit contribution paid
(1,024)
(989)
Remeasurements - impact of any change in assumptions
(101)
239
-
-
Provision at end of period
7,053
8,079
Income and expenditure impact
2018
2017
£’000
£’000
Interest expense
99
182
Remeasurements – impact of any change in assumptions
(101)
239
Costs recognised in income and expenditure account
(2)
421
Assumptions
31 Mar ‘18
31 Mar ‘17
31 Mar ‘16
% per annum % per annum % per annum
Rate of discount
1.72
1.33
2.06
The discount rates shown above are the equivalent single discount rates which, when used to discount the future recovery plan
contributions due, would give the same results as using a full AA corporate bond yield curve to discount the same recovery
plan contributions.
31 Mar ‘18
31 Mar ‘17
31 Mar ‘16
£’000
£’000
£’000
Year 1
1,063
1,025
964
Year 2
1,103
1,063
1,025
Year 3
990
1,103
1,063
Year 4
868
990
1,103
Year 5
898
868
990
Year 6
804
898
868
Year 7
702
804
898
Year 8
723
702
804
Year 9
372
723
702
Year 10
-
372
723
Year 11
-
-
372
The Association must recognise a liability measured as the present value of the contributions payable that arise from the
deficit recovery agreement and the resulting expense in the income and expenditure account i.e. the unwinding of the discount
rate as a finance cost in the period in which it arises. It is these contributions that have been used to derive the Association’s
Statement of Financial Position liability.
66
Accord Housing Association