BRITISH TOURIST AUTHORITY TRADING AS VISITBRITAIN ...

VisitBritain and VisitEngland
Notes forming part of the financial statements for the year ended 31 st March 2010 (Continued)
Accounting policies (Continued)
Financial liabilities
Financial liabilities include trade payables and other short-term monetary liabilities, which are recognised at fair value and
subsequently carried at amortised cost using the effective interest rate method.
Financial liabilities measured at fair value through profit and loss: This category comprises only out of the money derivatives.
They are carried in the statement of financial position at fair value with changes in fair value recognised in the comprehensive
statement of income and expenditure in other operating expenses.
Provisions for liabilities and charges
Provisions are made when an obligation exists for a future liability in respect of a past event and where the amount of the
obligation can be reliably estimated. Restructuring provisions are made for direct expenditure of a business reorganisation
where the plans are sufficiently detailed and well advanced, approved by the Board and where appropriate communication to
those affected has been undertaken at the statement of financial position date.
Impairment of non-financial assets (excluding inventories, investment properties and deferred tax assets)
Non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying
amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value
in use and fair value less costs to sell), the asset is written down accordingly. Where it is not possible to estimate the
recoverable amount of an individual asset, the impairment test is carried out on the asset's cash-generating unit (i.e. the lowest
group of assets in which the asset belongs for which there are separately identifiable cash flows).
Impairment charges are included in the administrative expenses line item in the comprehensive statement of income and
expenditure, except to the extent they reverse gains previously recognised in other comprehensive income and expenditure.
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of
the counterparty or default or significant delay in payment) that the group will be unable to collect all of the amounts due under
the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present
value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net;
such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in
the comprehensive statement of income and expenditure. On confirmation that the trade receivable will not be collectable, the
gross carrying value of the asset is written off against the associated provision.
Translation of foreign currencies
Foreign currency transactions arising from normal trading activities are recorded at the rates in effect at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies at the year end are translated at the year end
exchange rate. Foreign currency gains and losses are credited or charged to the comprehensive statement of income and
expenditure as they arise.
The comprehensive statement of income and expenditure of the overseas subsidiary undertaking are translated into pound
sterling at average exchange rates and the year-end net asset is translated at year-end exchange rate.
Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the
consolidated comprehensive statement of income and expenditure.
Government grants
Grant-in-aid received for revenue purpose from the sponsoring body is treated as financing by crediting it to the income and
expenditure reserve per FReM 11.2.18. Grant in aid received for the purchase of fixed assets in general is credited to the
income and expenditure reserve.
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