Annual Report and Financial Statements

Accounting policies
activity cost categorised on a basis consistent with the use
of resources. This allocation is carried out on a substantive
activity basis and does not take account of incidental use.
Governance costs are included within support costs and
comprise the costs of running the charity. This includes
external audit, any legal advice for the Trustees and all costs
of complying with constitutional and statutory requirements
such as the costs of Board and Committee meetings.
(f) Operating leases
Rentals applicable to operating leases, where substantially
all the risks and rewards of ownership remain with the lessor,
are charged in the statement of financial activities over
the life of the lease on a straight line basis. They include retail
shops, central offices, vehicles and photocopiers.
(g) Pension costs
The charity contributed to one defined benefit scheme in
the year, but also operates a defined contribution pension
scheme. Pension costs charged to the statement of
financial activities represent the contributions payable
by the charity in respect of the accounting period.
Both schemes are accounted for as defined contribution
schemes. Note 23 provides a detailed explanation.
(h) Taxation
The charity is exempt from Corporation Tax on its
charitable activities.
The charity is registered for Value Added Tax. Irrecoverable
VAT is allocated to the areas in which it is incurred.
(i) Tangible and intangible fixed assets
Tangible and intangible fixed assets are depreciated and
amortised in equal annual instalments, using the straight
line basis, over their estimated useful lives, as follows:
Little Bridge House, Charlton Farm
and Little Harbour
Other freehold buildings
Leasehold property
Medical equipment
Furniture and equipment; fixtures and fittings
Garden, play and external equipment
Soft furnishings
Computer equipment and software
Motor vehicles
50 years
5-50 years
Life of lease
5-10 years
4-20 years
5-10 years
4-5 years
3-5 years
4 years
No depreciation is provided on freehold land.
The cost of minor additions, defined as those costing less than
£500 each, are expensed in the year in which they are incurred.
(j) Fixed asset investments
Assets held with the intention of retaining them long-term
for the continuing benefit of the charity through income
and capital appreciation are classified as fixed asset
investments. These may include investments listed on
a recognised stock exchange (or ones valued by reference
to such investments, such as common investment funds,
open ended investment companies, and unit trusts),
investment land or properties, investments in subsidiary
undertakings, and cash held for investment purposes.
Fixed asset investments, other than cash deposits, are stated
at market valuation and any gains or losses are dealt with in
the statement of financial activities.
Investment in the subsidiary is stated at cost.
(k) Stock
Stock consists of purchased goods for resale. Purchased goods
for resale are valued at the lower of cost and net realisable
value, after allowing for obsolete and slow moving stock.
(l) Debtors
Other debtors, legacies receivable and accrued income are
recognised at the settlement amount due after any trade
discounts. Prepayments are valued at the amount prepaid
net of any trade discount.
Page 40 Children’s Hospice South West - Annual Report and Financial Statements for the year ended 31 March 2020