Notes to the financial statements

The principal accounting policies adopted in the preparation of these financial statements are set out below:

Basis of preparation

These financial statements are prepared in accordance with the requirements of the International Financial Reporting Standards as adopted by the European Union and with the requirements of the National Archives Act, 2005.

Basis of measurement

These financial statements have been prepared on the historical cost basis.

Property, plant, and equipment are stated at cost less accumulated depreciation.

Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount and are considered in determining operating profit.

Depreciation is charged to the statement of comprehensive income on a straight–line basis in order to write off the cost of each asset to its residual value over its estimated useful life as follows:

Archival Holdings acquired by the National Archives are capitalised and recognised in the statement of financial position at their cost at the date of acquisition. After initial recognition, these holdings are not depreciated, and still shown at cost. These assets cannot be replaced or reconstructed, therefore no market value can truly reflect the assets’ value to the nation’s heritage.

Trade receivables comprise amounts due from customers for services performed in the ordinary course of operations. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.

Cash and cash equivalents are carried in the statement of financial position at face value. In the statement of cash flows, cash and cash equivalents includes deposits held at call with banks.

Trade payables comprise obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Revenue is measured at the fair value of consideration received or receivable for the sale of goods and services in the ordinary course of the entity’s activities. Revenue is shown net of returns, rebates, and discounts.

The entity recognizes revenue when the amount of revenue can be reliably measured, when it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the entity’s activities.

Revenue from services is recognized in the accounting period in which the services are rendered, by references to completion of the specific transaction assessed based on the actual service provided as a proportion of the total services to be provided.

Government grants consist of capital asset grants. These are recognized at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. The fair value is credited to a deferred income account and is released to the statement of comprehensive income over the expected useful life of the relevant asset by equal annual instalments.

Amounts advanced by Government for recurrent expenditure are made in the form of subventions from the Consolidated Fund in accordance with Section 20 of the National Archives Act, 2005. In accordance with the selected accounting policy, these amounts are accounted for upon an accrual basis. During 2022, the subvention advanced by the Government amounted to €981,930 (2021: €920,000).

In 2007 an agreement was reached with the Ministry for Gozo to transfer monies from its vote to the National Archives of Malta to finance the Gozo branch’s employment costs and contribute towards its general and administrative running costs. An amount of €105,492 was transferred in 2022 (2021: €65,193).

Other income mainly relates to the release of a capital grant, photocopy services and digital images, sale of own publications and advertising in the newsletter.

remuneration amounted to €1,993 (2021: €1,482).

6. Taxation

The National Archives of Malta is exempt from any liability for the payment of income tax in accordance with Section 13 of the National Archives Act, 2005.

Where archival holdings of national significance are acquired or donated, other than on the open market, external valuers also play a part in the valuation of such holdings. The primary method of valuation involves the importance of the item in terms of the information content, context, and whether the item fills the gap in the archival landscape of the institution or country. However, these are unique items for which little or no comparable market data exists.

For the purposes of the statement of cash flows, cash and cash equivalents comprise the following:

The accumulated fund represents the accumulated access of revenue over expenditure.

Amounts advanced by Government for expenditure of a capital nature are made from the Consolidated Fund in accordance with Section 20 of the National Archives Act, 2005.

Deferred income from government grants relates to money received/receivable from this capital vote to finance capital expenditure and shall be recognised as income over the useful life of the asset.