2010 annual report and accounts - PDF 700KB - RAF Benevolent ...

Notes to theFinancial Statementsfor the year ended 31 December 20101. Principal accounting policiesBasis of preparationThe financial statements have been prepared under the historical costconvention, with the exception of investments which are included atmarket value, and in accordance with applicable accounting standards.The financial statements have been prepared in accordance with theStatement of Recommended Practice (SORP) “Accounting and Reportingby Charities” published in March 2005.The statement of financial activities (SOFA) and balance sheet consolidatethe financial statements of the charity and its subsidiary undertakings.The results of the subsidiaries are consolidated on a line-by-line basis.Separate SOFAs have not been presented as permitted by paragraph397 of the SORP.A summary of the results of the subsidiary entities are shown in Note 16.StatusThe Charity was incorporated by Royal Charter on 29 December 1999.The directors of the corporate body are the Trustees named on page 06.Fund accountingGeneral funds are unrestricted funds that are available for use atthe discretion of the Trustees in furtherance of the general objectsof the Charity and that have not been designated for other purposes.Designated funds comprise unrestricted funds that have been setaside by the Trustees for particular purposes. The aim and use of thedesignated funds is set out in the notes to the financial statements.Restricted funds are funds that are to be used in accordance with specificrestrictions imposed by donors or that have been raised by the Charity forparticular purposes. The costs of raising and administering such fundsare charged against the specific funds. The aim and use of the largerrestricted funds is set out in the notes to the financial statements.Investment income and gains are allocated to the appropriate fund.Incoming resourcesAll incoming resources are included in the SOFA when the Charity islegally entitled to the income and the amount can be quantified withreasonable accuracy. For legacies, entitlement is the earlier of theCharity being notified of an impending/imminent distribution or thelegacy being received.Gifts donated for resale are included as income when they are sold.No amounts are included in the financial statements for servicesdonated by volunteers.Resources expendedAll expenditure is accounted for on an accruals basis and has beenclassified under headings that aggregate all costs related to the category.Where costs cannot be directly attributed to the particular headings,they have been allocated to activities on a basis consistent with use ofresources. Premises overheads have been allocated on a floor area basisand other overheads have been allocated on the basis of head count.The SOFA defines costs in three specific categories:• cost of generating funds• charitable activities• governance costs.Costs of generating funds are those incurred in seeking voluntarycontributions and do not include the costs of disseminating informationin support of charitable activities.Costs of charitable activities relate to the work carried out on the corepurposes of the Fund, which are to provide relief and assistance to pastand present members of the RAF family who are in need and to enhancethe morale and wellbeing of Service personnel.Governance costs are those incurred in connection with theadministration of the Charity and compliance with constitutionaland statutory requirements.18 The Heart of the RAF family