Non-current assets Financial Reporting and Analysis

As part of the More Homes Scotland approach and linked to the delivery of 50,000 affordable homes by 2021, the Scottish Government launched a five-year Housing Infrastructure Fund in February 2016. While all types and tenures of housing are eligible for HIF support, priority will be given to those projects delivering affordable and private rented housing within the five-year period ending 31 March 2021. Prior to 1 July 1999, the Secretary of State loaned money to Scottish Enterprise, Scottish Homes and the three Water Authorities , from the National Loans Fund.

Woodside Health Centre – Service Concession agreement with HUB North of Scotland Ltd for occupancy of Woodside Health Centre effective 28 June 2014. Forres Health Centre – Service Concession agreement with HUB North of Scotland Ltd for occupancy of Forres Health Centre effective 9 August 2014. Stirling Health and Care Village – Service concession for the development and right of use of Community Health and Care facilities which brings together on one site a range of health, local authority and other partner organisation’s services.

Its primary objective is to provide cost-effective risk pooling and claims management arrangements for Scotland’s NHS Health Boards and Special Health Boards. Funds received from the European Union , are treated as income and shown in the relevant Portfolio Outturn Statement. Expenditure in respect of grants or subsidy claims is recorded in the period that the underlying event or activity giving entitlement to the grant or subsidy claim occurs. Any related payable or receivable balances are reflected in the Statement of Financial Position. Where there is a unitary payment stream that includes infrastructure and service elements that cannot be separated, the various elements will be separated using estimation techniques including obtaining information from the operator or using the fair value approach. Financial guarantee contract require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

The material uncertainty created by COVID-19 is especially relevant to the valuation of Land and Buildings, and further information is available about the estimated valuations in note 7. Annual report of the consolidated financial results of the Scottish Government, its Executive Agencies and the Crown Office, prepared in accordance with International Financial Reporting Standards . The Audit Scotland report on the accounts is also linked and is unqualified.

International business services

In the consolidated statement of financial position these must be recognised as liabilities at fair value, if there is a present obligation and it can be reliably measured. This will increase liabilities in the consolidated statement of financial position and actually increase goodwill . This includes current assets, non-current assets, fixed assets, and intangible assets from the company’s most recent set of financial statements. Both IFRS and US GAAP require assets held for sale to be presented separately in the financial statements.

Mid-market rent is a type of affordable housing where rents are lower than in the private market, but higher than social housing. Scottish Health Innovations Ltd is a company that works in partnership with NHS Scotland to protect and develop https://cryptolisting.org/ healthcare innovations. The company is limited by guarantee with three members, the Scottish Ministers, the National Waiting Times Centre, and NHS Tayside. In December 2019 the Ferguson Marine shipyard was brought into public ownership.

Property, plant and equipment

COVID-19 has impacted this year’s valuation process because it has increased the uncertainty of the immediate and medium-term economic outlook. Over the past 5 years, the Scottish Government has provided £10m to the Scottish Futures Trust for use in their oversight of the Non Profit Distributing Programme. Housing Loans include repayment and deferred loans, for the build or purchase of residential properties, including the delivery of affordable housing.

Shared equity loans advanced to private individuals will be reported in the ‘At fair value through profit & loss’ category. Intangible assets other than assets under development are amortised on a straight line basis over their estimated useful lives. Impairment reviews are carried out if there are any indicators that impairment should be considered. When the fair value of net assets exceeds the purchase consideration, the transaction is called a bargain purchase and its effect is recorded in profit and loss. Under both IFRS and US GAAP, goodwill arising from an acquisition is capitalized.

Different types of goodwill

The debt sale subsidy is the additional cost to the Scottish Government of government subsidies contractually due to the purchaser of the debts beyond the costs that the government would have incurred had the debts remained in the public sector. The debt sale subsidy provision is estimated to meet the cost of this subsidy over the expected life of loans sold. The utilisation of this provision is dependent on the timing of the repayment of the loans which is uncertain.

Where output tax is charged or input VAT is recoverable, the amounts are stated net of VAT. The road network is valued at depreciated replacement cost as it is deemed to be specialist in nature. The road pavement element is valued using agreed rates determined to identify the gross replacement cost of applicable types of road on the basis of new construction on a greenfield site. These rates are re-valued annually using indices to reflect current prices and are also updated when new construction costs become available as comparators to the costs previously identified for specific road types. To understand what is meant by the impairment of assets in a little more depth, let’s see an example.

• Income not applied includes amounts for surrender to the Scottish Consolidated Fund in accordance with the Scotland Act Order 2009 amended by Scotland Act 2012 and Scotland Act 2016.
• Stobhill Hospital – The Ambulatory Care and Diagnostic Treatment Centre contract commenced with Glasgow Healthcare Facilities Ltd on 1 April 2009 for a period of 30 years.
• HMP Addiewell – The contract covers the design, construction, financing and operation of HMP Addiewell.

Information and Communications Technology systems are capitalised where the pooled value exceeds £1,000. Furniture, fixtures and fittings are treated as current expenditure and are not capitalised. Any assets valued below these thresholds will be treated as expenditure in the year of purchase. These accounts reflect the consolidated assets and liabilities and the results for the year of all the entities within the Scottish Government accounting consolidation boundary. The structure of the Scottish Government and further information about the entities within the consolidation boundary is provided within the introduction of the Performance Report of these accounts. Deferred tax assets also arise from carrying forward unused tax losses and credits.

Non-current assets are assets other than those which meet the criteria for classification as current assets. Typical non-current assets include property, plant, and equipment , investment property, intangible assets, goodwill, financial assets, and deferred tax assets. The objective of IAS 16 is to prescribe the accounting treatment for property, plant, and equipment. The principal issues are the recognition of assets, the determination of their carrying amounts, and the depreciation charges and impairment losses to be recognised in relation to them.

Purchased goodwill is the goodwill that is acquired when a company pays a sum larger than the fair value to buy another business. For example, when acquiring a company the buyer might gain access to expertise or intellectual property that conveys in competitive advantage. This purchased goodwill is recorded as an asset under the label of goodwill on the balance sheet.

IAS 16/IAS 38 — Acceptable methods of depreciation and amortisation

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less an estimate of likely impairment. Impairment of trade receivables is calculated through an expected credit loss model. The Scottish Government reports segmental information within its outturn statements which are prepared on the basis of Ministerial portfolios. Operating income is income that relates directly to the operating activities of the Scottish Government. It includes fees and charges for services provided, on a full cost basis, to external customers, public repayment work and income from investments. It includes both income applied with limit as outlined by the Scottish Budget documents and income not applied.

According to standard accounting rules, also known as the Generally Accepted Accounting Principles , as goodwill is an intangible asset it is only recorded when there is a sale of the entire business or a subsidiary of the business; it cannot be generated internally. It can only be recorded in the accounts when there is an actual amount that has been paid over the fair price of the company. However, a calculation or estimate of the goodwill is often made during negotiations. IFRS and US GAAP both require measuring assets held for sale at the lower of the carrying amount and fair value less costs to sell. The hospital services are provided under a contract between Lanarkshire Health Board and Prospect Healthcare Limited, with hard and soft facilities management services being supplied under a subcontract to ISS Mediclean Limited. Mid Argyll Community Hospital and Integrated Care Centre Lochgilphead – NHS Highland financed the development of the Mid Argyll Community Hospital and Integrated Care Centre in Lochgilphead.

What is Impairment in Accounting?

However, these should be recorded only if sufficient future taxable profits are available in the future. The cumulative impairment is always deducted, in full, from the goodwill figure in the statement of financial position. If the non-controlling interest is recorded at fair value, then a percentage of impairment will be allocated to them , with the remainder being allocated to the group. If the non-controlling interest is held at the proportionate method, then the entire impairment is allocated to the group due to the fact that no goodwill has been attributed to the non-controlling interest.

Resources and accruing resources may be used only for the purposes specified and up to the amounts specified in the Budget Act. The Act also specifies an overall cash authorisation to operate for the financial year. The Scottish Government is not, therefore, exposed to significant liquidity risks.

A financial instrument is a contract that gives rise to a financial asset of one entity or financial liability or equity investment of another entity. Examples of financial assets include investments in stocks or bonds of another company. Some assets, such as derivatives, may be classified as either a financial asset or a liability depending on their value. Subsequent to initial www giftnet com recognition, a financial asset is carried either at fair value or amortized cost. In case of an intangible asset with an indefinite useful life, a company records no amortization but reviews the assumption of indefinite life and any impairment at least annually. While some analysts assign zero value to all intangible assets, a better approach to look at each individual asset.