Heythrop College (University of London) 2016 Financial Statements, Slides of Accounting

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Heythrop

College

The Specialist Philosophy

and Theology College

of the Umiversiiy of London

Heythrop

College

a

Financial Statements 31 July 2016

Charity registration number: 312923

Address: Heythrop College

University of London

Kensington Square

London WB 5HN

www. heythrop. ac.uk

Governors: See list of Governors on

page

3

Bankers: National Westminster Pic

11 The Parade

Canterbury

Kent

CT1 2DT

Solicitors;

Lee Bolton

Monier-Williams

1 The Sanctuary

Westminster

SW1P 3JT

Pinsent Masons

30 Crown

Place

Earl Street

London

EC2A 4ES

Auditors: BDO LLP

2 City

Place

Beehive

Ring

Road

Gatwick

West Sussex

RH6 OPA

1

Heythrop

College

'

Financial Statements 31 July

2016

LIST OF GOVERNORS, 2015-

Ex officio

Nominated

External

Members

President of the College

The Principal

Nominated

by

the

Trustees for

Roman Catholic

Purposes (TRCP)

Fr Dermot Preston

Rev MichaelHolman

(to

Prof Claire Ozanne (from 03-02-17)

Rev Brendan Callaghan

Dr Christine Carpenter

(to

Rev Keith McMillan

Mr Andrew Kennedy(chair from

to

Co-opted

External

Members

Elected

Internal

Members

tu ent

Members

ecretary

Nominated

by the

Archdiocese of

Westminster/Bishops' Conference

Nominated by

the University of

London

Members who

may not be

nominated by any

of the

groups

or

organisations already represented

Members of the academic staff

Member of

the

non-academic staff

President of

Heythrop

Students

Union

(HSU)

and one other

elected

by

HSU

Clerk to the Governing

Body

Archbishop Kevin McDonald

Prof John Davies

Prof Edward Acton

(to

3O-O9-15)

Dr Edel Mahony

Prof John Morrill (from

Mrs Jane Makower Mather

Mr

Jeremy Heap(Chair

from 27-07-16 to 28-09-16)

Mr John Darley

Mrs Tamsin Eastwood (Chair from 28-09-16)

Mr Michael Egan

Mr Loughlin Hickey

Mr John Ward (from

Dr Fiona Ellis (to

Mr Anthony

O'Mahony

Dr Michael Lacewing (to

31-o8-15)

Prof Michael Barnes SJ

Dr

Edward Howells (from

Dr

Michael Kirwan (from

Mr Nadeem Ahmad (to

Ms Shade Olutobi (from 22-01-16)

Mr Oliver Holdsworth (to

Mr Stefan Barratt (to

Mr Henry

Edwards-Xu (from

Mr Maawia Ahmed (from

Mrs Maureen Skinner

Heythrop College

a

Financial Statements 31 July 2016

Operating

and Financial Review

Introduction

Heythrop

College is the specialist Philosophy and

Theology

College of the University of London,

which it joined in 1970. The College was

founded in 1614 by

the Society of Jesus and still

receives substantial

support

from the

Society,

through the Trustees for Roman Catholic

Purposes (TRCP),

and since 2006-07 also from

the Higher

Education Funding Council for

England. The College offers University of London

degrees in Theology and Philosophy.

Although a small and specialist College within the

University of London, with under 500

undergraduate and postgraduate students in

2016, it had until recently the largest number of

students studying these subjects in one

institution, supported

by

a unique

historical/specialist philosophy and theology

library of 200, 000 volumes. The College also has

around 65

full and part-time academic staff

undertaking teaching, research and knowledge

transfer/outreach activities, with a wide range of

expertise in these subjects, supported

by

60

professional, administrative and support

staff.

In addition to undergraduate and postgraduate

degree programmes, it provides a resource for

faith communities and others, not least through

the work

of its Centres

and

institutes. Members

of the College staff have a wide range of

expertise,

with

particular strengths

in theology,

philosophy, psychology

of

religion,

interfaith

relations and

Abrahamic religions.

Heythrop

College continues to be the lead

institution for the ExternalDegrees in Theology

and Divinity in the University of London

International Programmes (formerly the External

System),

on which there are around 200

distance-learning students around the world.

Changes in the UK

Higher

Education environment

since 2012 have made it increasingly challenging

for Heythrop College to meet the costs of being a

small autonomous institution.

By

2014 it had

become apparent that these costs had become

greater than could be provided for bythe

College's

various sources of income, including

likely levels of tuition fees, which for the College

come from

just

two subject areas. Since the

College was no longer viable in its current form

alternative approaches were investigated,

including forming a strategic partnership with

another institution, setting

up

a consortium of

small institutions to share the costs of services

and continuing as an autonomous institution with

radical reshaping.

In June 2015 the governors concluded, Heythrop

College,

University of London, will continue for

the next three vears and then cease to be a

College of the federal University.

By

the summer

of 2018, we will have fulfilled our commitments

to

our present students including those who

commenced study in September 2016.The

College will give highest priority to protecting and

enhancing the student experience during this

teach out, but after the teach out is completed

the College will close.

The Governors continue to work with the Society

of Jesus to find a new form in which the mission

and work of the College, includingthe

ecclesiastical faculties which are of great

importance to the Church in Britain, can continue

after 2018.

Mission

The Mission of the College is:

~

To serve society through philosophy and

theology

To offer its students an education

marked by

intelligence, scholarship and

generosity

of spirit

~ To

foster

interfaith dialogue

~

To be a resource for the Christian faith

community; and

~ To provide leadership in Catholic thought.

Objectives

The objectives of Heythrop College are,

from

within the Catholic tradition, to make a

significant contribution in the fields of theology

and philosophyto the intellectual and

educational life of the University, of society in

general and of the Christian community in

particular; and to maintain and enhance its

reputation for scholarship

nationally and

internationally. The College seeks to meet these

objectives through its teaching for degrees and

diplomas in theology and philosophy, through its

research and supervision of graduate students,

through its library, the H

eythrop

Journal and

other publications and through the wider

influences of members of the faculty and its

graduates.

4

Heythrop

College

&

Financial Statements 31 July

2016

College's

research environment, which was

judged as having the vitality and sustainability

conducive

to

research

that is world leading or

internationally excellent.

The results of the work reflect the combined

work of Philosophy, Theology and related

subjects, which at Heythrop enjoy a shared

research environment

and a close intellectual

interaction.

Kn o

wledge

transfer/outreach

Heythrop's prominence on a central London site

as a centre for conferences, lectures and

study

days, has allowed it to develop its wider mission

as a place of learning and reflection at the

service of the Church and wider society.

The

College Centres

and Institutes have

developed

an ecumenical and interreligious

dimension which are recognised internationally.

They contribute to the

College's

research culture

by supporting

academic initiatives

through

dedicated conferences and seminars which

reach out to scholars, journalists, opinion

formers and

policy

makers.

They

also facilitate

outreach to the general public, and specifically

to the churches, allowing for a good measure of

continuing education.

The College

collaborates in

both teaching and

research with institutions across

Europe and the

US,

in particular

with

other

Jesuit-founded

Universities. Fordham University of New York

has a base on the Kensington site and links

between the two institutions remain strong.

Other institutional links have been developed

with the Australian Catholic University, and with

other

ecclesiastical

faculties in Northern Europe.

A resource for the Church

H

eythrop's service

to

the

Catholic Church at

home and overseas has been enhanced

with the

reactivation by

the

Congregation for Catholic

Education of the College's ecclesiastical

faculties, the Bellarmine Institute, enablingstill

more church students to benefit from studying

for the professional qualifications needed for

ministry

in conjunction with

degrees of the

University of London.

In many

other

ways

the

College providesthe

expertise and the space for conversations

involving those working inside and outside the

Church for the common

good,

for a socially and

culturally cohesive and understanding society.

Academic and Financial Sustainability

The short term sustainability issue for the

College is to ensure that it continues to deliver a

high quality

teaching and learning

experience for

its current and future students

studying

for

University of London degrees. The College is

fortunate to be supported bythe Society of

Jesus which has confirmed

its intention to

provide the College with the resources

needed

to

enable

the

commitments

to students and

staff to be honoured,

up to an agreed limit and

subject to certain conditions.

STRATEGIC PRIORITIES FOR 2016-

The College's key priority

for 2016-17 is to teach

out the existing University of London

degree

programmes to a high standard.

THANKS

The Governing Body would like to record its

gratitude to Mr Andrew Kennedy who served as

the Chair of the Governing Bodyfor much of the

year,

student members

Mr Oliver Holdsworth

and Mr Stefan Barratt, and Mr Nadeem Ahmad,

the professional

support

staff representative,

who have retired from the

Governing

Bodyfor

their valuable contribution to the work of the

College and for their commitment to

Heythrop

and its mission.

Heythrop College

4

Financial Statements 31 July 2016

F I NANCIAL PERFORMANCE 2015-

Ov eral I Financial Performance

The statement of comprehensive income and

expenditure records a deficit of $1.1m, which

includes a $0.4m provision to cover the

statutory

redundancy costs and

a

$0.5m

provision to

cover

other closure costs that will be

incurred by

the College as it winds down its

operation.

Disregarding the closure cost provisions, the

College incurred a deficit of 2198k on normal

operations. The deficit of f198k compares to a

budgeted deficit of 2556k and the better than

budgeted

out-turn

on normal operations is

mainly due to a historic rebate of business rates

which was agreed during the year.

In addition

to the

closure

costs for which

provision has been made, the

College

will also

have to meet the deficits existing in the

pensions schemes of which the

College

is

a

member which will crystallise on closure, or

when the last member of the schemes leaves

the employ of the College. Provision has not

been made for these deficits in these financial

statements as it has not been possible to obtain

a reliable estimate of the size of these deficits at

the date of crystallisation.

The Governors have an undertaking from TROP

to meet these costs,

up

to a certain limit and

subject to certain conditions which the

Governors consider sufficient to allow the

College to continue in operation.

Income

income from the Higher Education Funding

Council for England during the year totalled

f482k an increase of 5140k on the previous

year.

The increase is attributable

to research

funding which increased as a result of the

College's improved performance in the latest

Research assessment exercise. The increased

research funding is however offset to some

extent

by

a reduction in teaching grant reflecting

the change in the funding regime for higher

education students.

Income from Tuition Fees has decreased

by

since the

prior year

reflecting the financial

impact of the College's decision to cease the

recruitment of undergraduatestudents in 2015.

Income from other sources is

broadly the

sa me

as in the previous year reflecting a high level of

utilisation of the Kensington Square campus.

Income from donations and endowments is

lower than in the previous year but this is mainly

due to a technical accounting issue concerning

the release of deferred capital grant to offsetthe

depreciation

charge

in the College accounts.

Expenditure

Excluding the closure costs provisions, in overall

terms expenditure (excluding depreciation) is

13% lower than the previous year. Staff costs

are 572k lower than the previous year reflecting

a small reduction in staff numbers.

Other operating costs are 2332k lower than the

previous year.

A large part

of this reduction

is

due to a historic rebate of business rates but

costs

have also reduced

as

there has

been a

gradualslowdown in activity on functions such

as marketing

and business

development as

the

College teaches out its remaining students.

The depreciation charge for the

year

has

reduced by

52,446k since the previous year as

the College has re-evaluated the expected

useful lives of its assets following the decision to

remain on the Kensington Square site until

October 2018.

Balance Sheet

The

College's balance

sheet shows that the

College had reserves of 23.06m at the end of

the financial

year,

a decrease of 51.1m

ref lectingthe deficit incurred duringthe year.

Net current liabilities have decreased

by

52, 109k to 2570k, largely due to the change in

the expected useful life of College assets and

the reclassification of balances previously

recorded

as

deferred

capital grants as a result

of the adoption of a new accounting standard

FRS 102.These balances, which are shown as

donations in note 11 to the accounts, are

notional accounting entries which will be

released to the statement of income and

expenditure to offsetthe depreciation charge.

The

College's

cash position has improved on the

previous year and the Governing Body considers

that the College has sufficient resources

to

continue trading.

Heythrop College

t

Financial Statements 31 July

2016

PUBLICBENEFIT

The

College's important

role in advancing

education and religion

for the

public

benefit

is reflected in its mission and objectives;

examples of the

many

achievements of the

past year

in providing

benefit to the public

in line with these aims have been set out

elsewhere in this report. In making

decisions about the public benefit deriving

from the activities

of

the College the

Governors have had due regard to the

public benefit guidance issued by

the

Charity Commission.

H eythrop's service to society is to educate

students

in

a

context of

valuing and

respecting

others and their beliefs, to work in a society that

acknowledges and understands diversity. The

College believes that the study of philosophy

and theology, as other humanities subjects, has

the potential to transform the experience of an

individual, enabling them to understand their

place

in the world with

deeper

understanding

and humanity. These subjects promote

life-

changing personal

development, teach students

to

engage

with ideas critically and

independently, and equip

students with the

skills necessary to understand

and thus work

in and manage

—

complexity and change.

The College provides resources not

only

for

students but for the wider community, not least

through one of the finest specialist libraries in

the UK, built

up

over 400 years, which is open to

all those who have a scholarly interest in the

subject. The

College's 'knowledge transfer'

places resources at the service of manyfaith-

based organizations and the wider community.

The work of the Centres and Institutes continues

to contribute to this resource through

publications,

seminars and events.

Heythrop

is a

leader in the field of inter-religious and interfaith

dialogue, which informs much of its teaching

provision.

organisations. The Centre for Eastern

Christianity runs public conferences on very live

issues such as the impact of current conflicts on

the Christian communities in Syria, while the

Religious Life Institute is an internationally

recognized resource for those living and working

in religious

communities.

The College will continue to provide courses to a

wide range

of students and sections of the

public who may benefit from its teaching and

research. Bursaries

have been

provided to

ensure that the

financially disadvantaged are

more able to take

up

courses of

study

with

confidence.

Lifelong learning is a fundamental

principle

at

the College, which supports students to find

their vocation, whatever that may be, at any

stage of their lives. Heythrop has a rich

programme of evening and

part-time study, from

study days and short

courses to

postgraduate

and

research degrees. Intensive modules have

been offered in

ethics for healthcare and for

business which have been valued

by

practitioners. It is also the lead College for

Theology

in the University of

London's

International Programme, many of whom study

in the UK.

The

College's

postgraduate programmes are

taken

by

a wide range of professionals working

in the public sector,

charities and community

Heythrop

College

v

Financial Statements 31 July 2016

The

College's approach

to ensuringfair

access to students is set out fully in its

Access Agreement, which is available on

the College's website. Whilst the College

has a particular focus on the Christian (and,

in particular, Catholic) traditions, we

welcome students and staff from a wide

variety of backgrounds

and people

of all

religious beliefs and

none. The College is

committed to providing an environment

that is free from every kind of unlawful or

inappropriate

discrimination.

The College welcomed applications

from

students with learning difficulties and

disabilities, and the College is committed to

practical policies which allow, as far as

possible,

for equality

of

opportunity

and

access to the higher and

further education

programmes which we provide. The College

has established a cross-department Equality

and Diversity Forum for staff and students,

which is

taking

forward

the equality and

diversity strategy.

The College's Code of

Practice for the Research Excellence

Framework exercise was noted for its

features of

good

practice by

the Higher

Education Funding Council.

Access is available to all teaching

and study

areas and provision is made for access to

other facilities and ground-floor

accommodation in the student residence if

required.

Care is taken in the timetabling

process to

ensure students' needs are taken

into account. Special arrangements

are

made for examinations as required

and IT

equipment provided. The

College's academic

and pastoral support was particularly

commended bythe QAA Institutional Audit of

2011.The provision

of material

electronically through the Virtual Learning

Environment (Helios) has also contributed to

the accessibility of learning resources.

Approved bythe Governing Body on ( Apri(2017and signed

on its behalf by:

Mrs

Tamsin Eastwood

Chair of the

Governing Body

10

Heythrop College

'Financial Statements 31 July

the

College's transactions and disclose with

reasonable accuracyat anytimethefinancial

position

of the College

and enable them to

ensure that the financial statements

comply

wkh

the Royal Charter, its

Articles of Association, the

Accounts Direction as issued

by

the Higher

Education Funding Council for England (HEFCE)

and the Statement of Recommended Practice:

Accounting for Further and Higher Education.

They

are also responsible for safeguarding the

assets of the College and hence for taking

reasonable

steps

for the prevention and

detection of fraud and other

irregularities.

Members of the Board are responsible for

ensuring that the funds from HEFCE are used

only in accordance with the Memorandum

of

Assurance and

Accountability with the Higher

Education Funding Council for England and any

other conditions that the Funding Council may

prescribe from time to time. Members of the

Board must ensure there are

appropriate

financial and management controls in place in

order to safeguard public

and otherfundsand to

ensure they

are used properly.

In addition,

members of the Board are responsible for

securing economical, efficient and effective

management

of the

College's

resources and

expenditure, so that the benefits that should be

derived from the application of public

funds by

the Funding Council are not put at

risk.

Financial

statements are published on the

College's website in accordance with legislation

in the United Kingdom governing

the preparation

and dissemination of financia I statements,

which may varyfrom

legislation in other

jurisdictions. The maintenance and integrity

of

the College's website is the responsibility of the

members of the Board. The members of the

Board's responsibility also extends to the

ongoing integrity

of the financial statements

contained therein.

Approved bythe Governing Body on 0 April 2017 and siNted

on its behalf by:

~CCIjk s

Mrs Tamsin Eastwood

Chair of the Governing Body

Mr Michael Egan

Chair of Audit Committee

Heythrop College

t

Financial Statements 31 July 2016

IN DEPENDENT

AUDITORS' REPORT TO THE GOVERNORS OF

HEYTHROP COLLEGE

We were engaged to audit the financial statements of

Heythrop

College for the year ended 31 July 2016

which comprise the

Statement of Comprehensive

Income, Statement of Changes in Reserves, the

Balance Sheet, the Cash Flow Statement and the

related

notes. The financial reporting

framework that

has been applied in their preparation is applicable

law and United Kingdom Accounting

Standards

(United Kingdom Generally Accepted Accounting

Practice).

This report

is made solely to the College's Governors,

as a body, in accordance with paragraph 154 of the

Chanties Act 2011 and Charter and Statutes of the

College. Our

audit work has been undertaken so that

we might state to the

College's Governors those

matters we are required to state to them in an

auditor's report

and for no other purpose.

To the

fullest

extent permitted by law,

we do not accept or

assume responsibility to anyone other than the

College and the College's Governors as a body, for

our audit work, for this report, or for the opinions we

have formed.

Respective

Responsibilities of the College's

Governing

BodyendAuditors

As explained

more fully

in the statement of

responsibilities of the Board of Governors, the

members of the Governing Body are responsible for

the preparation

of the financial statements and for

being satisfied that they give a true

and fair view.

Our responsibility is to audit and express an opinion

on

the financial statements in accordance with

applicable law, regulatory

requirements and

International Standards on Auditing (UK and Ireland)

and the Audit Code of Practice issued by

the Higher

Education Funding Council for England. Those

standards require us to comply with the

Financial

Reporting

Council's (FRC's) Ethical Standards for

Auditors.

Scope of the

audit of the financial statements

A description of the scope of an audit of

financial

statements is provided on the

FRC's website at

www.

frc. org.

uk/auditscopeukprivate.

In addition,

we also report to you

whether income

from funding bodies, grants

and income for specific

purposes and from other restricted

funds

administered by

the College have been properly

applied only

for the purposes

for which they were

received and whether income has been applied

in

accordance with the Statutes and, where

appropriate,

with the Memorandum of Assurance and

Accountability with

the Higher

Education Funding

Council for England.

Basis for qualified opinion

As explained in note 18,

the Board of Governors has

taken the decision to close the College after the end

of the 2017-18academic year and has since taken a

number of steps to effect this

closure. This

decision

to cease trading has an effect on the valuation of the

defined benefit pension liabilities at the balance

sheet

date. The Board of Governors has sought

advice from its actuaries in order to determine the

value of the pension liabilities but has been advised

that, until certain decisions are taken, the value of

the pension

liabilities cannot be determined with

material precision. As a consequence,

the Board has

not recognised a defined benefit pension liability in

the balance sheet and continue to account for the

pension scheme as a defined

contribution scheme

which is contraiy to

the requirements of FRS 102.

Note 14 provides details about the possible effects of

this non-recognition and the amounts involved. Our

opinion is therefore qualified in this respect.

Qualified opinion on the financial statements

In our opinion,

exceptfor the

effects

o the matter

described in the Basis

for qualified opinion

paragraph,

the financial statements:

~ give a true and fair view of the state of the

College's affairs as at 31 July 2016 and of the

College's income and expenditure, gains

and

losses and

reserves and the cash flows for the

year;

~ have been properly prepared in accordance with

United Kingdom Generally Accepted Accounting

Practice; and

~ have

been properly prepared

in accordance with

the Charities Act 2011 and the Statement of

Recommended Practice: Accounting for Further

and Higher

Education.

Emphasis of matter

—

basis of preparation

We draw attention to note 18 to

the financial

statements, which explains that, as a consequence

of the decision

taken by

the board of governors that

the college will cease operating

after the end

of the

2017-18 academic year, the college is no longer a

going

concern and the financial statements have

therefore been prepared

on a basis other than that of

a going concern. Except

for the implications on the

value of pension liabilities explained above, our

opinion is not qualified in this respect.

13

Heythrop

College

&

Financial Statements 31 July

2016

Statement of Comprehensive Income and Expenditure

Year Ended Year Ended

Notes

31 July

2016 31 July 2015

Income

Tuition

fees

and

education contracts

Funding body grants

Research grants

and contracts

Otherincome

Investment income

Total income before endowments and donations

799, 813 5,586, 542

Donations and Endowments 6

Total income 10,642, 231 14,

Expenditure

Staff costs

Fundamental restructuring costs

Other operating expenses

Depreciation

Interest and other finance costs

Total expenditure

Deficit before other gains

losses

Gain on investments 15

(Deficit)/Surplus

and total comprehensive

income for the year

Represented by:

Endowment comprehensive income for the year

Unrestricted comprehensive income for the year

(Deficit)/Surplus attributable to the College

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Heythrop

College

a

Financial Statements 31 July

2016

Cash Flow

Statement

Cash flow from operating activities

Surplus /(Deficit)

for the year

Adjustment for non-cash items

Depreciation

Loss

(Gain) on investments

Decrease/(increase) in debtors

Increase/(decrease) in creditors

Increase/(decrease) in pension provision

Increas/(decrease in other provisions)

Adjustment for investing or financing activities

Investment income

Interest payable

Net cash inflow from operating activities

Notes

Year Ended

31 July

Year Ended

31 July 2015

Cash flows from investing activities

Proceeds from sales of fixed assets

Investment income

Cash flows from financing

activities

Interest paid

(Decrease)/increase in cash and cash equivalents in the year

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at

end of the year

Heythrop College

a

Financial Statements 31 July 2016

Statement of Principal Accounting

Policies

Basis of preparation

These

financial statements

have been

prepared in accordance with the Statement of

Recommended Practice (SORP): Accounting for

Further and Higher Education 2015 and in

accordance with Financial Reporting Standard

(FRS)

102. The College is a public benefit

entity and therefore has applied the relevant

public benefit requirement of FRS 102.

In June

2015the governors concluded,

Heythrop College, University of London, will

continue for the next three years and then

cease to be a College of the

federal University.

By

the summer of 2018, we will have fulfilled

our commitments to our present students

including those who commenced study in

September

2016.The College will

gwe highest

pnority to protecting and enhancing the

student experience during this teach out. The

Governors have decided that after all the

obligations to the current students have been

discharged the College will cease to operate

and this is likely to be after the end of the

2017-18 academic

year.

These accounts have

therefore

been prepared

on a

break up

basis.

Basis of accounting

The financial statements are prepared

on a

basis

other than that of going

concern. This

means that the historical cost basis has been

applied

except where this is inappropriate

given

the break up

basis of preparation.

Income recognition

Income from tuition fees is credited to the

Statement of Comprehensive Income and

Expenditure

over the period

in which students

are studying and includes all fees chargeable

to students or their sponsors. Fee income is

stated gross

except where the amount of the

tuition fee is reduced by

a discount, in which

case it is shown net of the discount. Bursaries

and scholarships are accounted for gross as

expenditure and not deducted from income.

Income from the sale of goods or services is

credited to the Statement of Comprehensive

Income and Expenditure when the goods or

services are supplied

to the external

customers

or the terms of the contract have

been satisfied.

Investment income is credited to the income and

expenditure

account on a

receivable basis.

Funds the College

receives

and disburses as

paying

agent on behalf of a Funding Body are

excluded from the income and expenditure of the

College where the College is exposed to minimal

risk or enjoys

minimal economic benefit related to

the transaction.

Grant Funding

Government revenue grants including funding

council block grant and research grants are

recognised in income over the periods in which

the College recognises

the related costs for

which the grant is intended to compensate.

Where part of a government grant is deferred

it is recognised in deferred income within

creditors and allocated between creditors due

within one year and due after more than one

year as appropriate.

Grants (including

research grants)

from non-

government sources are recognised in income

when the College is entitled to the income and

performance related conditions have been

met. Income received in advance of

performance related conditions being met is

recognised as deferred income within creditors

in the balance sheet and released to income

as the conditions are

met.

Donations and Endowments

Non exchange transactions without

performance related

conditions are donations

and endowments. Donations and

endowments with donor imposed restrictions

are recognised in

income when the College is

entitled to the funds. Income is retained in the

restricted reserve until such time that it is

utilised in line with such restrictions at which

point

the income is released to general

reserves through a

reserve transfer.

Donations with no restrictions are recognised

in income

when the College is entitled to the

funds.

Investment income and the appreciation of

endowments is recorded in income in the year

in which it arises and as either restricted or

unrestricted income according to the terms of

the

restriction applied

to the individual

endowment fund.

There are four main types

of donations and

endowments recognised

within reserves:

Restricted donations

—

the donor has

specified that the donation must be used for

a particular ob)ective.

Unrestricted permanent endowments

the

donor has specified

that the fund is to be

permanently invested to generate an income

stream for the general benefit of the

institution.

19