Financial Statements 2018 financial statement- joomag | Page 67

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