RNLI ANNUAL REPORT AND ACCOUNTS 2011

RNLI notes to the accountsFOR THE YEAR ENDED 31 DECEMBER 20111 ACCOUNTING POLICIESa) Basis of accountingThe accounts have been prepared under the historical costconvention, except that investments are stated at market value.The accounts have been prepared in accordance withapplicable accounting standards, the Charities Act 2011, and theStatement of Recommended Practice (SORP), Accounting andReporting by Charities (revised 2005) (second edition 2008).b) Basis of consolidationAll subsidiary companies have been consolidated on a line-bylinebasis.c) DepreciationTangible fixed assets costing more than £10,000 are capitalisedand included at cost.Fixed assets are depreciated over their current anticipatedlives, which are assessed as follows:Goodwill andintellectual propertyLifeboat stationsand shoreworksOther freehold/leasehold buildingsLifeboatsLaunching equipmentOffice furnitureand depot plantComputer andelectronic equipmentMotor vehicles: straight line over 20 years: straight line over 50 years: straight line over50 years/period of lease: 13–25% reducingbalance per annum: 13% reducing balanceper annum: straight line over 5–10 years: straight line over 4 years: straight line over 4 years.d) Pension schemeThe RNLI operates a defined benefit pension scheme coveringits employees in the UK and the RoI. The scheme was closedto new entrants from 1 January 2007. A defined contributionpension scheme was established for new staff joining after thatdate. The defined benefit scheme assets are held in a separateTrustee-administered fund. The cost charged in the Statement ofFinancial Activities (SoFA) represents current service costs andgains and losses on settlements and curtailments calculated inaccordance with FRS17. Actuarial gains and losses are recognisedimmediately. Further details are shown in note 14.e) Incoming resourcesAll incoming resources are included in the SoFA when the RNLI islegally entitled to the income and the amount can be quantifiedwith reasonable accuracy. Pecuniary legacies are recognised asreceivable once probate has been granted and notification hasbeen received. Residuary legacies are recognised as receivableonce probate has been granted, on an estimated basis as follows:cash elements are recognised at monetary value, with propertyand other assets, including investments, valued at probate orestimated market value. Values are reviewed and adjusted atthe accounting date as required. The RNLI maintains a legacypipeline system which, in addition to forecast legacies, includesfurther estimated legacies of which the RNLI is aware, but whichdo not meet the above criteria, and which therefore have notbeen included within these accounts. Donations in kind arevalued at the value in use of the assets to the RNLI.f) Resources expendedAll expenditure is accounted for on an accruals basis and hasbeen classified under headings that aggregate all costs relatedto the category. Support costs representing expenditure ontraining, estates and administration, financial management,human resources administration and information systemsand infrastructure have been allocated to rescue, prevention,operational maintenance, innovation, governance and the costof generating voluntary income on the basis of cost. Governancecosts are those costs associated with the governance arrangementsrather than the day-to-day management of the RNLI.RNLI lifeguardteaching water safetyat a Manchesterjunior school21