Annual Report and Accounts 2009-10 - Welfare Reform impact ...

) Property, plant and equipment
Property, plant and equipment consists of IT hardware and equipment
held only for the purpose of managing the ILF. All property, plant and
equipment should be carried at valuation in accordance with the FReM.
The ILF does not have land or buildings, and has taken advantage of the
option available under the FReM to adopt a depreciated historical cost basis
as a proxy for fair value of its plant and equipment, as these are assets that
have short useful economic lives or low values (or both). The ILF believes
that the useful economic life is a realistic reflection of the life of its plant
and equipment, and the depreciated historical cost method provides a
realistic reflection of the consumption of those assets. The ILF therefore
carries plant and equipment at cost less accumulated depreciation and
any recognised impairment in value.
c) Depreciation
Depreciation on property, plant and equipment is charged on a straight
line basis to write off the cost less residual values over the useful life of
the asset. IT hardware and equipment are generally depreciated over a
three- to five-year life span. Residual values, remaining useful lives and
depreciation methods are reviewed annually and adjusted if appropriate.
d) Intangible assets
Intangible assets consist of bespoke software developed for the ILF
and software licences held only for the purpose of managing the ILF.
All intangible assets should be carried at valuation in accordance with
the FReM.
Bespoke software assets are capitalised in these accounts in the year
of implementation and, as a proxy for fair value, are carried at depreciated
replacement cost. Amortisation is on a straight line basis over the estimated
useful life of three years.
Software licences are capitalised in these accounts in the year of acquisition
and, as a proxy for fair value, are carried at depreciated replacement cost.
Amortisation is on a straight line basis over the estimated useful life, being
the period of the software licences.
Amortisation periods and methods are reviewed annually and adjusted
if appropriate.
78 Independent Living Fund (2006)