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Statement of accounting policies |
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³ÉÈËÂÛ̳ World Service, funded principally by parliamentary Grant-in-Aid, is a division of the British Broadcasting Corporation, a body incorporated by Royal Charter.
The financial statements have been prepared in accordance with the provisions of the ³ÉÈËÂÛ̳'s Charter and Agreement. Although not mandatory, ³ÉÈËÂÛ̳ World Service has chosen to follow the accounting and disclosure provisions of the Companies Act 1985 and applicable UK accounting standards to ensure that its financial statements are prepared on a basis consistent with that of UK companies.
³ÉÈËÂÛ̳ World Service does not produce consolidated financial statements as the activities of its subsidiaries
and associates are not material.
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Basis of accounting
The
financial statements are presented under the historical cost accounting
convention as modified by the revaluation of certain plant and machinery
and furniture and fittings. ³ÉÈËÂÛ̳ World Service has adopted early the
following accounting standards:
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Financial Reporting Standard (FRS) 17: Retirement Benefits ³ÉÈËÂÛ̳ World Service has adopted early the first year transitional arrangements of FRS 17. These arrangements require certain additional disclosures to be given which are included in note 3d of the financial statements. There is no effect on the results or financial position of ³ÉÈËÂÛ̳ World Service, as the transitional provisions require only
disclosures to be made. FRS 17 will be fully adopted in the financial statements for the year ended 31 March 2002. |
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FRS 18: Accounting Policies Adoption of this standard has not had a material impact on the results of ³ÉÈËÂÛ̳ World Service. |
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FRS 19: Deferred Taxation There is no material impact on the results of ³ÉÈËÂÛ̳ World Service but additional disclosure is provided in note 4.
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Income
Grant-in-Aid from the Foreign and Commonwealth Office is intended to meet estimated expenditure in the year but unexpended receipts for the year, within predetermined limits, are not liable to surrender.
Other income received by ³ÉÈËÂÛ̳ World Service is set out in note 1a of the financial statements.
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Foreign currency translation
Transactions in foreign currencies are translated into sterling at the rates of exchange ruling at the date of the transactions.
Assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at 31 March or at forward rates where related hedging contracts are in place. Surpluses and deficits arising from the translation of assets and liabilities at these rates of exchange, together with exchange differences arising from trading, are included in the statement of income and expenditure.
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Pension costs
The ³ÉÈËÂÛ̳ operates both defined benefit and defined contribution schemes for the benefit of employees.
The defined benefit scheme, the ³ÉÈËÂÛ̳ Pension Scheme, provides benefits based on final pensionable pay. Amounts are charged to expenditure so as to spread the cost of pensions over employees’ working lives with ³ÉÈËÂÛ̳ World Service. Any difference between the charge to the income and expenditure account and the contributions paid is shown as a provision or prepayment on the balance sheet. The assets of the ³ÉÈËÂÛ̳ Pension Scheme are held separately from those of the ³ÉÈËÂÛ̳ group.
As noted above, the ³ÉÈËÂÛ̳ has adopted early the first year transitional arrangements of FRS 17 and additional disclosure regarding the ³ÉÈËÂÛ̳ Pension Scheme has been provided.
The amount charged as expenditure for the defined contribution scheme represents the contributions payable by ³ÉÈËÂÛ̳ World Service for the accounting period in respect of this scheme.
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Operating leases
Operating lease rentals are charged on a straight line basis over the term of the lease.
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Tangible fixed assets
Expenditure on fixed assets is capitalised together with incremental and internal direct labour costs incurred on capital projects.
Depreciation is calculated so as to write off the cost or valuation less estimated residual value of fixed assets on a straight line basis over their expected useful lives. Depreciation commences from the date an asset is brought into service.
The useful lives for depreciation purposes for the principal categories of assets are:
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