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Annual Report 2006-2007 - Cafcass

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Cash Flow Statement for the year ended 31st March <strong>2007</strong><br />

Note <strong>2006</strong>–07<br />

£000<br />

Restated 2005–06<br />

£000<br />

Net cash inflow/(outflow) from operating activities 18a (102,456) (99,393)<br />

Capital expenditure and financial investment 18b (2,531) (489)<br />

Financing 18c 104,373 100,865<br />

(Decrease)/increase in cash (614) 983<br />

The notes on pages 54 to 66 form part of these financial statements.<br />

Notes to the account year ended 31st<br />

March <strong>2007</strong><br />

1 Accounting policies<br />

These financial statements are drawn up in accordance<br />

with the Treasury’s Financial <strong>Report</strong>ing Manual (FReM)<br />

and applicable accounting standards. They are in a form as<br />

directed by the Secretary of State for Education and Skills<br />

with the approval of the Treasury.<br />

The following accounting policies have been applied<br />

consistently in dealing with items considered material in<br />

relation to the accounts.<br />

a) Accounting convention<br />

The accounts are prepared under the historical cost<br />

convention, modified to include fixed assets at their<br />

value to the business by reference to current costs.<br />

Without limiting the information given, the accounts<br />

meet the accounting and disclosure requirements of the<br />

Companies Act 1985 and accounting standards issued<br />

or adopted by the Accounting Standards Board so far as<br />

those requirements are relevant. The accounts are also<br />

consistent, where appropriate, with generally accepted<br />

accounting practice in the United Kingdom (UK GAAP).<br />

b) Going concern<br />

Parliament has voted grant in aid to <strong>Cafcass</strong> for the 12<br />

months following the Balance Sheet date. Therefore,<br />

despite the Balance Sheet position of net liabilities,<br />

<strong>Cafcass</strong> operates as a going concern.<br />

c) Tangible fixed assets<br />

Freehold land and buildings were revalued externally<br />

by the Valuation Office Agency (VOA) as at 1st April <strong>2007</strong><br />

in accordance with the RICS Appraisal and Valuation<br />

Manual, published by the Royal Institution of Chartered<br />

Surveyors, insofar as this is consistent with current<br />

Treasury accounting guidance. Freehold properties are<br />

subject to revaluation by the VOA at least every three years<br />

and by indexation using current cost indices in intervening<br />

years. Leasehold land and buildings and associated<br />

improvements are not subject to revaluation or indexation.<br />

Other tangible fixed assets, except for leasehold property,<br />

have been stated at their value to the business using<br />

appropriate indices published by the Office for National<br />

Statistics. Revaluations above the depreciated historic cost<br />

of an asset are credited to a revaluation reserve. Amounts<br />

equivalent to the depreciation charge on the revaluation<br />

element are then credited to the Income and Expenditure<br />

Account to offset the total depreciation charged on that<br />

asset based on the revalued amount.<br />

Any downward revaluation of fixed assets below the<br />

asset’s depreciated historic cost is offset against any<br />

balance in the revaluation reserve relating to that<br />

particular asset, otherwise it is charged directly to the<br />

Income and Expenditure Account.<br />

Tangible fixed assets include those assets costing £2,500<br />

or more. Individual items valued at less than the threshold<br />

are capitalised if they constitute integral parts of a<br />

composite asset that is in total valued at more than the<br />

threshold. Furniture and fittings are not capitalised but<br />

fully expensed in the year of acquisition.<br />

d) Depreciation<br />

Freehold land is not depreciated.<br />

Depreciation is provided to write-off freehold buildings<br />

and other tangible fixed assets by instalments over their<br />

expected useful lives or, for leased assets, over the life of<br />

the lease.<br />

54 | <strong>Cafcass</strong> <strong>Annual</strong> <strong>Report</strong> and Accounts <strong>2006</strong>–07

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