sport-england-2016-17-annual-report-and-accounts

Financial asset income is recognised on a receipts
basis due to the timing of statements from the
investment fund. The accounting treatment
adopted materially matches income accrued.
1.5 Grants
Grant awards are recognised as expenditure, and if
unpaid, as liabilities if a constructive obligation
exists.
For a constructive obligation to exist the award
commitment must be communicated directly to
the award recipient, and Sport England has the
authority to commit the expenditure. Grant awards
are only recognised in the year of funding as the
Grant-in-Aid accounts cannot guarantee funding
in future years.
Grant awards which are funded from future year’s
funding are shown as contingent liabilities (shown
as future commitments – note 17).
1.6 Other expenditure
Staff costs are recognised as an expense at the
time that the organisation is obligated to pay
them and include the cost of any recorded
untaken leave at the end of the financial year.
Costs relating to the National sports centres,
Sports development and Operating costs are
expensed in the year in which they are incurred.
Sport England is required to apportion
expenditure between its Exchequer and National
Lottery Distribution Fund (Lottery) activities. The
apportionment of expenditure is calculated using
metrics derived from the organisation’s annual
business planning process, unless the costs are
considered to be entirely Exchequer or Lottery
related. The resulting cost allocations are subject
to annual review by the Executive Team. These
calculations are also subject to audit.
The current methodology calculates charges on a
full cost recovery basis in accordance with HM
Treasury’s Managing Public Money. The
expenditure apportioned under this methodology
to Sport England Lottery activities are reimbursed
to the Exchequer account (note 9).
1.7 Property operating leases
Payments made under operating leases (rental
agreements) are recognised in the Statement of
comprehensive net expenditure on a straight line
basis over the term of the lease. Lease incentives
(e.g. rent free periods) are recognised as an
integral part of the total lease expense, over the
term of the lease.
1.8 Assets gifted to subsidiaries
Assets gifted to subsidiaries are expensed in the
year in which they are gifted.
1.9 Property, plant and equipment
All property, plant and equipment, other than IT
Equipment, are owned by The Sports Council Trust
Company (SCTC). Asset additions are funded by a
Lottery grant from the Sport England Lottery Fund
and capital works paid for by Sport England
Grant-in-Aid and gifted to the SCTC.
Land and Buildings
Valuations are carried out by external experts.
Land is valued annually. Full valuations of
buildings are carried out on a quinquennial basis,
between full valuations annual indexation is
applied. The last full valuation of buildings was
carried out as at 31 March 2014.
Valuations are based on Depreciated Replacement
Cost (DRC) for specialist properties, and open
market value for other properties.
The DRC basis generates an open market
valuation of the land. The valuation of each
building is derived through an estimate being
made of the gross current replacement cost of the
buildings and other site works, from which
deductions are then made to allow for age,
condition and obsolescence.
Any assets under construction are valued at the
costs incurred to date.
Artworks and Antiques
The artworks and antiques are valued by external
experts. The last valuation was carried out as at 31
March 2014. The valuations are derived with
reference to the retail market (at the valuation
date) and the probable cost of replacing the items
when compared with items in a similar condition.
Equipment and leasehold improvements
Other property, plant and equipment have not
been re-valued as fair value is considered not to
be materially different to depreciated historic cost.
The capitalisation threshold is £1,000 and assets
purchased below the capitalisation threshold are
normally expensed in year, with the exception of
grouped assets. Grouped assets are assets, which
individually, are less then £1,000 however together
form a single collective asset.
The English Sports Council Grant-in-Aid Consolidated Accounts for the year ended 31 March 2017 67