MPA - statement of accounts

34Notes to the Financial StatementsThe Authority also operates 4,764 patrol cars,motorbikes and other vehicles (2006-07 4,909), 25boats including inflatables and dinghies (2006-07 –28), a radio network with 30,351 radios (2006-0730,352), 51,343 airwave terminals (2006-07- 41,000)and 3 helicopters (2006-07 - 3).Basis of ValuationA revaluation has been performed on the entireoperational property portfolio as at 1 April 2007, with20% being physically inspected and 80% beingreviewed on a desktop basis. This approach is part ofa rolling programme of revaluations that is conductedby G. L. Hearn Ltd and Drivers Jonas (both membersof the Royal Institute of Chartered Surveyors) ensuringthat all operational land and buildings within the estateare subject to inspection and revaluation at least onceevery five years.The residential portfolio has been subject to arevaluation exercise and a value shown in theaccounts as at 31 March 2008 in line with accountingpolicies. In addition the asset lives of residentialproperties have been extended to 50 years (from 40years) on the advice of the external valuer. This hashad the effect of reducing the depreciation charge by£0.4 million for 2007-08.Buildings under construction are valued on the basisof the associated land value plus the cumulativeconstruction costs incurred at 31 March 2008.Financing Account (CFA). The credit balances of£1,381 million and £63 million on the FARA and CFArespectively at 31 March 2007 have been written off tothe Capital Adjustment Account with a resulting creditbalance of £1,444 million. The Revaluation Reservehas been included in the Balance Sheet with a zeroopening balance. The closing balance on theRevaluation Reserve of £53.9 million at 31 March 2008only shows revaluation gains accumulated since as at1 April 2007.Redundant DepreciationThe redundant depreciation figure totalling £31.6million in the above analysis of movements are equaland opposite amounts arising from the new valuationfor property, which gives a more accurate figure for thevalue of land and buildings. The balances foraccumulated depreciation for these buildings becomeredundant and should not be carried forward in theBalance Sheet, but are written out.Impairment ReviewFinal Impairment reviews were performed at the yearendon Land and Buildings and on Vehicles, Plant andEquipment. No further impairment of capitalexpenditure was identified beyond that which wasidentified during the year either as a result ofthe property revaluation process or as a result ofaccident damage and obsolescence.Short life assets such as vehicles, plant, furniture andequipment are included at depreciated historic cost.Community assets have been included in the balancesheet following valuations placed on them by internaland external valuers. These consist of pictures,vehicles, furniture and museum pieces, which are atpresent in long-term storage, which have been giftedover many years.During the year, transfers of £55.6 million were madefor those assets under construction, which werecompleted and became operating assets.Revaluation ReserveThe Balance Sheet figures for 31 March 2007 havebeen adjusted from those included in the Statement ofAccounts for 2006-07 to accommodate theimplementation of the Revaluation Reserve (seeaccounting policies, page 18). The RevaluationReserve and Capital Adjustment Account replace theFixed Asset Restatement Account (FARA) and CapitalCapital ExpenditureItems of capital expenditure for the year were:2007-08 2006-07£’000 £’000Intangible Assets 3,608 6,229Tangible AssetsLand and Buildings 23,213 44,734Plant and Equipment 184 245Information 51,962 53,214TechnologyVehicles 15,233 19,566Assets under 53,251 28,282constructionSub total 147,451 152,270Deferred Charge 339 2,209Total 147,790 154,479