Martlet Homes Limited - Hyde Housing Association

MARTLET HOMES LIMITED
NOTES TO THE ACCOUNTS
YEAR ENDED 31 MARCH 2010
1. ACCOUNTING POLICIES (CONTINUED)
Depreciation of housing properties
Depreciation of freehold housing properties is charged so as to write down their cost (net
of Social Housing Grant) to their residual value on a straight line basis over their expected
useful economic lives for the Association on the following basis:
Housing properties held for letting, Typically 100 years on a straight line basis
completed shared ownership properties
and freehold shops and offices
Improvement expenditure on housing Typically 25 years on a straight line basis
property.
Freehold land is not depreciated.
Depreciation of other fixed assets
Other fixed assets are depreciated on the following basis:
Freehold premises
2% on a straight line basis
Leasehold premises
Over the life of the lease on a straight line
basis
Furniture and equipment
15% on reducing balance
Computer hardware
2 years on a straight line basis
Motor vehicles
25% on reducing balance
Assets are depreciated per month from the purchase date.
Stock
Stock of first tranche shared ownership units and building materials are held in the balance
sheet at the lower of cost and net realisable value.
Bad and doubtful debts
The Association provides for bad and doubtful debts based on 50% of current arrears, 10%
of supported tenant arrears and 100% of all former tenant arrears.
Treasury Management/Derivatives
The Association’s funding, liquidity and exposure to interest rate risks are managed by the
Group Board. Treasury operations are conducted on a Group basis within a framework of
policies and guidelines authorised by the Group Board. To manage interest rate risk the
Group manages its proportion of fixed to variable rate borrowings within approved limits
and where appropriate utilises interest rate swap agreements. Amounts payable or
receivable in respect of these agreements are recognised as adjustments to interest
expense over the period of the agreement.
Taxation
The Association has charitable status and therefore is not subject to Corporation Tax on
the surplus arising from charitable activities. Provision is made for the tax liabilities which
may arise when property is developed for commercial outright sale.
VAT
The Association’s VAT affairs are dealt with under a group registration in the name of Hyde
Housing Association Limited. The Association recovers only a small proportion of input VAT.
Expenditure is therefore shown inclusive of VAT, to the extent that it is not recoverable, with
non-attributable input tax recovered being credited against management expenses.
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