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Annual Accounts 2010 - University of Abertay Dundee

Annual Accounts 2010 - University of Abertay Dundee

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<strong>University</strong> <strong>of</strong> <strong>Abertay</strong> <strong>Dundee</strong><strong>Annual</strong> report and financial statements31 July 2011Statement <strong>of</strong> principal accounting policies (continued)Cash FlowsCash flows comprise increases or decreases in cash. Cash includes cash in hand, deposits repayable on demandand overdrafts. Deposits are repayable if they are in practice available within 24 hours without penalty. Liquidresources comprise assets held as a readily disposable store <strong>of</strong> value. They include deposits, governmentsecurities and loan stock held as part <strong>of</strong> the <strong>University</strong>'s treasury management activities.Foreign CurrenciesTransactions denominated in foreign currencies are recorded at the exchange rates ruling at the dates <strong>of</strong> thetransactions. Monetary assets and liabilities denominated in foreign currencies are translated into sterling atyear-end rates. The resulting exchange differences are dealt with in the determination <strong>of</strong> income andexpenditure for the financial year.Financial InstrumentsFinancial Instruments are recognised on the balance sheet when an obligation is identified and released as thatobligation is fulfilled. Cash, debtors, creditors and borrowing are held at cost. Measurement <strong>of</strong> investments isdiscussed above.Accounting for Charitable DonationsCharitable donations are recognised in the accounts when the charitable donation has been received or if, beforereceipt, there is sufficient evidence to provide the necessary certainty that the donation will be received and thevalue <strong>of</strong> the incoming resources can be measured with sufficient reliability.Charitable donations which are expendable with no restrictions placed on the <strong>University</strong> by the donor on theapplication <strong>of</strong> the donation are recognised as in the income and expenditure account during the year <strong>of</strong> receipt.Endowment FundsWhere charitable donations are restricted to a particular objective specified by the donor or where the capitalelement must be maintained, these are accounted for as an endowment on the balance sheet. There are threemain types:Unrestricted Permanent Endowments – the donor prescribes that the capital element <strong>of</strong> the donation must bemaintained but the income earned thereon is expendable with no restriction placed on its application by the<strong>University</strong>.Restricted Permanent Endowments – the capital fund is maintained and the income thereon must be applied to apurpose specified by the donor.Restricted Expendable Endowments – there is no requirement to maintain the capital element but the incomereceived is only expendable against the objectives specified by the donor.Where donations must be applied to the purchase and / or construction <strong>of</strong> tangible fixed assets then these arerecognised as a deferred capital grant on the balance sheet.15

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