SAAS Annual Report and Accounts 2013-2014 - page 38

0133
Depreciation
Depreciation is provided on all PPE assets at rates calculated to write off the cost, less estimated residual
value, of each asset evenly over its expected useful life as follows:
Furniture and fittings – 10 years
Information technology – 5 years
Plant and machinery
– between 5 and 10 years
From financial year 2004-05 all purchases of furniture and fittings are treated as current expenditure and
are no longer capitalised. Therefore furniture and fittings depreciation relates only to historic purchases.
Componentisation
Where it is appropriate to do so, the agency will componentise its property, plant and equipment assets
and separately depreciate each item.
Impairment reviews
Impairment reviews are carried out each year. In 2013-14 we took the decision to delay implementation
work on one of our IT development projects and have impaired the costs incurred on this asset under
development.
1.3 Intangible assets
Recognition
Future economic benefit has been used as the criteria in assessing whether an intangible asset meets the
definition and recognition criteria of IAS 38 where assets do not generate income. IAS 38 defines future
economic benefit as, ‘revenue from the sale of products or services, cost savings, or other benefits resulting
from the use of the asset by the entity’.
Non income generating assets are carried at amortised replacement cost. These valuation methods are
considered to be a proxy for fair value.
Expenditure on software development is capitalised if it meets the criteria specified in the FReM which are
adapted from IAS 38 to take account of the not-for-profit context. Expenditure which does not meet the
criteria for capitalisation is treated as an operating cost in the year in which it is incurred.
The development costs for designing, building and enhancing the in-house student awards processing
system, StEPS, are included in intangible assets. Staff costs for those working directly on the project are
capitalised. Salaries for (Band C) management would only be capitalised in exceptional circumstances if
actively involved in the technical development of the system.
Amortisation
Intangible assets are amortised at rates calculated to write off the cost, less estimated residual value, of
each asset evenly over its expected useful life as follows:
In-house developed software – 5 years
Purchased software licences – 3 years
Componentisation
Where it is appropriate to do so, the agency will componentise its intangible assets and separately
depreciate each item.
Impairment reviews
Impairment reviews are carried out each year. In 2013-14 no impairment of our intangible assets was required.
1.4 Trade payables
Trade payables are recognised at fair value and are for goods or services received by the Agency. We apply
the Scottish Government’s policy of paying invoices within 10 days of receipt of the invoice or delivery of
the goods or services, whichever is later.
1...,28,29,30,31,32,33,34,35,36,37 39,40,41,42,43,44,45,46,47,48,...50
Powered by FlippingBook