SAAS Annual Report and Accounts 2013-2014 - page 37

Notes to the Accounts
for the year ended 31 March 2014
1 Statement of accounting policies
In accordance with the accounts direction issued by Scottish Ministers under section 19(4) of the Public
Finance and Accountability (Scotland) Act 2000 (reproduced at page 50) these financial statements have
been prepared in accordance with the 2013-14 Government Financial Reporting Manual (FReM) issued by
HM Treasury. The accounting policies contained in the FReM apply International Financial Reporting
Standards (IFRS) as adopted or interpreted for the public sector context. Where the FReM permits a choice
of accounting policy, the accounting policy which is judged to be the most appropriate to the particular
circumstances of the Student Awards Agency for Scotland for the purpose of giving a true and fair view
has been selected. The particular policies adopted by the Student Awards Agency for Scotland are
described below. They have been applied consistently in dealing with items that are considered to be
material to the accounts.
The accounts are prepared using accounting policies, and, where necessary, estimation techniques, which
are selected as the most appropriate for the purpose of giving a true and fair view in accordance with the
principles set out in International Accounting Standard 8: Accounting Policies, Changes in Accounting
Estimates and Errors. Changes in accounting policies which do not give rise to a prior year adjustment are
reported in the relevant note.
1.1 Accounting Convention
These accounts have been prepared under the historical cost convention modified to account for the
revaluation of investment property, property, plant and equipment, intangible assets and certain financial
assets and liabilities to fair value as determined by the relevant accounting standard.
1.2 Property, Plant and Equipment (PPE)
All PPE assets will be accounted for as non-current assets unless they are deemed to be held for sale.
PPE assets comprise computer equipment, hardware and plant and machinery. They are capitalised at
their cost of acquisition and installation. Furniture and fittings purchased prior to financial year 2004-05
are also capitalised. However, following a decision by the Scottish Government, with effect from financial
year 2004-05 all purchases of furniture and fittings are treated as current expenditure and are no longer
Depreciated historic cost has been used as a proxy for the current value of plant and machinery.
The lower threshold for capitalising PPE assets is £1,000. Computer equipment hardware includes
individual assets whose costs fall below the threshold, but if they are of a similar nature they are grouped
together and capitalised.
The Agency does not own any land or buildings. A charge for the rental of accommodation is included in
the expenditure account.
Subsequent Cost
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Agency and the cost of the item can be measured reliably. The carrying amount of any replaced parts
will be derecognised as an asset. All other repairs and maintenance are charged to the operating cost
statement during the financial period in which they are incurred.
Notes to the Accounts
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