2011/2012 audited annual accounts - Falkirk Council

FALKIRK COUNCIL
When an asset is disposed of or decommissioned, the carrying amount of the asset in the Balance Sheet (whether
Property, Plant and Equipment or Assets Held for Sale) is written off to the Other Operating Expenditure line in
the Comprehensive Income and Expenditure Statement as part of the gain or loss on disposal. Receipts from
disposals (if any) are credited to the same line in the Comprehensive Income and Expenditure Statement also as
part of the gain or loss on disposal (i.e. netted off against the carrying value of the asset at the time of disposal).
Any revaluation gains accumulated for the asset in the Revaluation Reserve are transferred to the Capital
Adjustment Account.
Amounts received for disposal are categorised as capital receipts. All receipts are credited to the Capital
Receipts Reserve, and can then only be used for new capital investment or set aside to reduce the Council’s
underlying need to borrow (the capital financing requirement). Receipts are appropriated to the Reserves from
the General Fund Balance in the Movement in Reserves Statement.
The written-off value of disposals is not a charge against council tax, as the cost of non-current assets is fully
provided for under separate arrangements for capital financing. Amounts are appropriated to the Capital
Adjustment Account from the General Fund Balance in the Movement in Reserves Statement.
29. HERITAGE ASSETS
Heritage Assets are defined as assets which have historical, artistic, scientific, technological or environmental
qualities and are held and maintained principally for their contribution to knowledge and culture. It is a distinct
asset class which is reported separately from Property, Plant and Equipment and Intangible Assets.
Recognition
Heritage Assets are recognised where cost or valuation information is available. Where the cost or value is not
available, and the cost of obtaining the information is disproportionate in terms of the benefit derived, the Code
does not require that the assets are recognised on the Balance Sheet. Heritage Assets recognised in 2011/12,
have been recognised through the Revaluation Reserve.
Measurement
The Code following the requirements of FRS30, has relaxed its valuation approach for Heritage Assets and it
specifies that:
• valuations may be made by any method that is appropriate and relevant; this may include, for example,
insurance valuations.
• valuations need not be carried out by external valuers, and neither is there a requirement for valuations
to be verified by external valuers
• a full valuation every 5 years is not required; there is no prescribed minimum period between valuations
Assets are either measured at valuation or at cost if valuation information is not available. Where valuation is
available this is based on insurance valuation. Any increases in valuation are matched by credits to the
Revaluation Reserve to recognise unrealised gains. Any decrease in value is accounted for by writing down the
gain against the balance on the Revaluation Reserve for that asset, or where there is no balance on the
Revaluation Reserve, writing down against the relevant service line(s) in the Comprehensive Income and
Expenditure Statement.
Impairment
Heritage Assets are reviewed periodically where there is evidence of physical deterioration or breakage. Where
impairment losses are identified, they are accounted for, by writing down the loss against the balance on the
Revaluation Reserve for that asset, or where there is no balance on the Revaluation Reserve, writing down
against the relevant service line(s) in the Comprehensive Income and Expenditure Statement.
Depreciation
The Council does not consider it appropriate to charge depreciation in respect of Heritage Assets due to the
undetermined levels and high residual values.
Falkirk Council holds 6 different categories of Heritage Assets which are as follows:
• Museums Collection
• Archives Collection
• Art Collection
• Libraries Local History Collection
• Civic Regalia
• War Memorials and Town Clocks
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