Financial Statements | Annual Report and Accounts 2017–18
Statement of principal accounting policies
1. Basis of preparation
3. Income recognition
These financial statements have been prepared in accordance with the Statement of Recommended Practice (SORP): Accounting for Further and Higher Education (2015), United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law), and the OfS and HEFCE Accounts Direction. The College is a public benefit entity and therefore has applied the relevant public benefit requirements of the United Kingdom Generally Accepted Accounting Practice. The financial statements are prepared under the historical cost convention (modified by the revaluation of endowment and listed non-current asset investments and investment properties). The accounting policies have been applied consistently year on year. The College’s and consolidated forecasts and projections, taking account of reasonably possible changes in performance, show that the College should be able to operate within the level of its current facilities. Council have a reasonable expectation that the College has adequate resources to continue in operational existence for the foreseeable future. The College therefore continues to adopt the going concern basis in preparing its financial statements.
Income from the sale of goods or services is credited to the consolidated statement of comprehensive income and expenditure when the goods or services are supplied to the external customers or the terms of the contract have been satisfied. Tuition fee income is stated gross of any expenditure which is not a discount and credited to the consolidated statement of comprehensive income and expenditure over the period in which students are studying. Where the amount of the tuition fee is reduced, income receivable is shown net of the discount. Bursaries and scholarships are accounted for gross as expenditure and not deducted from income. Government grants are credited to the consolidated statement of comprehensive income and expenditure when the College is entitled to the income and any performance related conditions have been met. Income from research grants and contracts is credited to the consolidated statement of comprehensive income and expenditure when the College is entitled to the income and any performance related conditions have been met. Income received before performance-related conditions have been met is deferred on the statement of financial position and released to the consolidated statement of comprehensive income and expenditure in line with such conditions being met. Funds the College receives and disburses as paying agent on behalf of a funding body are excluded from the consolidated statement of comprehensive income and expenditure where the College is exposed to minimal risk or enjoys minimal economic benefit related to the transaction. Donations and endowments (a form of charitable trust retained for the benefit of the College) with donor imposed restrictions are credited to the consolidated statement of comprehensive income and expenditure when the College is entitled to the income. This income is retained within the restricted reserve, with additional disclosures provided within the notes to the accounts, until such time that it is utilised in line with such restrictions at which point the income is released to general reserves through a reserve transfer. There are four main types of donations and endowments identified within reserves:
2. Basis of consolidation The consolidated financial statements include the College and all its subsidiaries, including the Imperial College Union, for the financial year to 31 July. The results of subsidiaries acquired or disposed of during the period are included in the consolidated statement of income and expenditure from the date of acquisition, or up to the date of disposal. Intragroup transactions are eliminated on consolidation. The College has taken advantage of the exemption within FRS 102 Section 33.1A and has not disclosed transactions with other group entities where it holds 100% of the voting rights. Associated companies and joint ventures are accounted for using the equity method. Associated companies are those in which the College has a significant, but not dominant, influence over their commercial and financial policy decisions. Joint ventures represent investments in which the College has joint control.
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