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Durham University
b. Valuation Tangible fixed assets are stated as follows:
9. Investments Investments in subsidiary companies are stated at the original cost of the investment and reviewed for impairment where appropriate.
Asset
Basis
Land
Deemed cost at 1 August 2014 (valuation at that date).
Buildings
Cost or, in the case of buildings for which the cost cannot readily be ascertained, at valuation.
Equipment and other tangible fixed assets
Cost
A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying amount of the fixed asset may not be recoverable.
Investment property is land and buildings held for rental income or capital appreciation rather than for delivering services. Investment properties are measured initially at cost and subsequently at fair value with movements recognised in the Statement of Comprehensive Income and Expenditure. Properties are not depreciated but are revalued or reviewed annually according to market conditions at the balance sheet date. Current asset investments are included in the balance sheet at fair value with movements recognised in the Statement of Comprehensive Income and Expenditure.
10. Stock
c. Depreciation Freehold land is not depreciated as it is considered to have an indefinite useful life. Other tangible assets are depreciated on a straight line basis over their useful life as follows: Buildings
15 to 50 years according to the designated useful life of its components
General and scientific equipment, furniture and IT infrastructure
8 years
Motor vehicles and computer equipment and software
4 years
Equipment acquired for specific research projects
Project life (generally 3 years)
Stock is stated at the lower of cost and net realisable value.
11. Cash and cash equivalents Cash includes cash in hand, deposits repayable on demand and overdrafts. Deposits are repayable on demand if they are available within 24 hours without penalty. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash with insignificant risk of change in value. Cash and cash equivalents contain sums relating to endowment reserves which bear restrictions regarding their use.
12. Financial Instruments No depreciation is charged on assets in the course of construction. Borrowing costs attributable to the acquisition or construction of a fixed asset are not capitalised but are recognised as an expense in the Statement of Comprehensive Income and Expenditure in the period in which they are incurred.
Costs of financial instruments used to hedge interest rate risk are held on the Balance Sheet at fair value with movements in fair value recognised in the Statement of Comprehensive Income and Expenditure.
13. Provisions 8. Heritage assets Assets meeting the definition of a heritage asset that have a cost or value of over ÂŁ10,000 and were acquired since 1 August 2007 are capitalised at cost or value on acquisition, where such a valuation is reasonably obtainable. Heritage assets where a value is maintained for insurance purposes are recognised at deemed cost based on a valuation at 1 August 2016. Other heritage assets are not capitalised as obtaining and maintaining valuations for them would be prohibitively expensive due to the extent of the collections. Heritage assets are defined as ‘tangible assets with historical, artistic, scientific, technological, geophysical or environmental qualities that are held and maintained principally for their contribution to knowledge and culture’. Heritage assets are not depreciated as their long economic life and high residual value mean that any depreciation would not be material.
Provisions are recognised in the financial statements where the University has a present financial obligation as a result of a past event and it is probable that a cost will arise on settlement of the obligation and a reliable estimate can be made of its value. The amount recognised is determined by discounting the expected future cash flows at a rate that reflects risks specific to the liability.
14. Taxation The University is an exempt charity within the meaning of Schedule 3 of the Charities Act 2011 and is therefore a charity within the meaning of Paragraph 1 of Schedule 6 to the Finance Act 2010. Accordingly, the University is potentially exempt from taxation in respect of income or capital gains received within categories covered by Sections 478-488 of the Corporation Tax Act 2010 and Section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that such income or gains are applied to exclusively charitable purposes.