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Applying UK GAAP to FHE & Housing Associations (Grants (Further &…
Applying UK GAAP to FHE & Housing Associations
UK accounting standards
FRS 100
Sets out framework
FRS 101
Considers whether reduced disclosure can apply to an entity
FRS 102
Single standard bringing together all previous published standards
General compliance with FRS 102:
FHE & Housing subject to separate SORPs
FRC issues statements in both identifying no fundamental conflicts with accounting standards
Grants
Recognised as income when
Sufficient certainty of receipt
Conditions met
Accruals Model
Grant needs to match expenditure
Performance Model
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Further & Higher Education Institutes
Revenue Grants & Capital Grants
May choose either model
Capital Grants relating to land
Must use Performance Model
SORP follows FRS 102
Social Housing in Housing Associations
Social Housing Assistance (SHA)
Capital grant to build or purchase new social housing stock
SORP requires valuation to be based on:
Cost => Accruals Model
Valuation => Performance Model
Impact of Financial Statements
Performance Model
Income credited to SOCI
Depreciation to SOCI
Accruals Model
Revenue matched with grant
Repayment & Recycling of SHA on Disposal
Right to Acquire
Must be recycled
Non Right to Acquire
Recycled or Repaid
At value it was originally received
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Recycle time = 3 years max
Valuation of Housing Stock
Investment or Operational Fixed Asset
Investment
Disclosure
Rented at Market Value
Not held for social benefit purpose
Held for capital appreciation or rental returns or both
Valuations
Reported at Fair Value
Revalued at end of each reporting period
Operational
Disclosure
Held for social benefit purpose
Held at cost or at valuation
Endowments at FHE