Annual Report 2006-2007 - Cafcass

Cash Flow Statement for the year ended 31st March 2007
Note 2006–07
£000
Restated 2005–06
£000
Net cash inflow/(outflow) from operating activities 18a (102,456) (99,393)
Capital expenditure and financial investment 18b (2,531) (489)
Financing 18c 104,373 100,865
(Decrease)/increase in cash (614) 983
The notes on pages 54 to 66 form part of these financial statements.
Notes to the account year ended 31st
March 2007
1 Accounting policies
These financial statements are drawn up in accordance
with the Treasury’s Financial Reporting Manual (FReM)
and applicable accounting standards. They are in a form as
directed by the Secretary of State for Education and Skills
with the approval of the Treasury.
The following accounting policies have been applied
consistently in dealing with items considered material in
relation to the accounts.
a) Accounting convention
The accounts are prepared under the historical cost
convention, modified to include fixed assets at their
value to the business by reference to current costs.
Without limiting the information given, the accounts
meet the accounting and disclosure requirements of the
Companies Act 1985 and accounting standards issued
or adopted by the Accounting Standards Board so far as
those requirements are relevant. The accounts are also
consistent, where appropriate, with generally accepted
accounting practice in the United Kingdom (UK GAAP).
b) Going concern
Parliament has voted grant in aid to Cafcass for the 12
months following the Balance Sheet date. Therefore,
despite the Balance Sheet position of net liabilities,
Cafcass operates as a going concern.
c) Tangible fixed assets
Freehold land and buildings were revalued externally
by the Valuation Office Agency (VOA) as at 1st April 2007
in accordance with the RICS Appraisal and Valuation
Manual, published by the Royal Institution of Chartered
Surveyors, insofar as this is consistent with current
Treasury accounting guidance. Freehold properties are
subject to revaluation by the VOA at least every three years
and by indexation using current cost indices in intervening
years. Leasehold land and buildings and associated
improvements are not subject to revaluation or indexation.
Other tangible fixed assets, except for leasehold property,
have been stated at their value to the business using
appropriate indices published by the Office for National
Statistics. Revaluations above the depreciated historic cost
of an asset are credited to a revaluation reserve. Amounts
equivalent to the depreciation charge on the revaluation
element are then credited to the Income and Expenditure
Account to offset the total depreciation charged on that
asset based on the revalued amount.
Any downward revaluation of fixed assets below the
asset’s depreciated historic cost is offset against any
balance in the revaluation reserve relating to that
particular asset, otherwise it is charged directly to the
Income and Expenditure Account.
Tangible fixed assets include those assets costing £2,500
or more. Individual items valued at less than the threshold
are capitalised if they constitute integral parts of a
composite asset that is in total valued at more than the
threshold. Furniture and fittings are not capitalised but
fully expensed in the year of acquisition.
d) Depreciation
Freehold land is not depreciated.
Depreciation is provided to write-off freehold buildings
and other tangible fixed assets by instalments over their
expected useful lives or, for leased assets, over the life of
the lease.
54 | Cafcass Annual Report and Accounts 2006–07