Statement of Accounts 2020 / 21
Statement of Accounting Policies ( continued ) For the year ended 31 July 2021
Significant accounting estimates and judgements ( continued ) Useful economic life ( UEL ) of tangible assets
Property , plant and equipment represent a significant proportion of the Group ’ s and University ’ s total assets . Therefore , the estimated useful lives can have a significant impact on the depreciation charged and the reported performance . Useful lives are determined at the time the asset is acquired , and the UEL of its assets is reviewed annually . The UEL are based on historical experience with similar assets as well as anticipation of future events . The UEL is shown in Statement of Accounting Policies section 13 .
Provisions
Management apply judgement to arrive at the best estimate for any obligation required . The amount recognised as a provision is management ’ s best estimate of the present value of the amount required to settle the obligation . To arrive at this amount , management assess the likelihood and extent of any future settlement and make judgements based on these .
Employee leave accrual
A liability for holiday pay is recognised due to accounting standards necessitating that short-term employee benefits be charged to the Statement of Comprehensive Income and Expenditure as the employee service is received . Information has been gathered from the HR / Payroll system on holiday balances , with assumptions having been made for staff where this information was not possible to collect . These balances were then applied against individual pay data to calculate the employee leave accrual . At the reporting date , the employee leave accrual in Creditors : amounts falling due within one year is £ 3,500k ( 2020 : £ 3,500k ). Year ended 2020 figure increased compared with 2019 due to staff delaying their annual leave , and in 2021 the additional annual leave scheme operated by the University meant that this higher than usual employee leave accrual was maintained .
Income recognition
Judgement is applied in determining the value and timing of certain income items to be recognised in the financial statements . This includes determining when performance related conditions have been met , and determining the revenues associated with partially delivered courses and training where the activities have not been fully completed at the reporting date .
Retirement benefits Keele Superannuation Scheme and Local Government Pension Scheme
The cost of defined benefit pension plans are determined using actuarial valuations . The actuarial valuation involves making assumptions about discount rates , future salary increases , mortality rates and future pension increases . Due to the complexity of the valuation , the underlying assumptions and the long-term nature of these plans , such estimates are subject to significant uncertainty . The actuarial assumptions are set by the University , having first considered actuarial advice . In determining the appropriate discount rate , the University considers the interest rates of corporate bonds with an AA rating , with extrapolated maturities corresponding to the expected duration of the defined benefit obligation . The mortality rate is based on publicly available mortality tables . Future salary increases for KSS are based on expected future inflation rates , and for LGPS are based on the most recent actuarial valuation for the Staffordshire Local Government Pension fund . Further details are given in note 32 .
University Superannuation Scheme
FRS 102 makes the distinction between a Group Plan and a multi-employer scheme . A Group Plan consists of a collection of entities under common control typically with a sponsoring employer . A multi-employer scheme is a scheme for entities not under common control and represents ( typically ) an industry-wide scheme such as USS . The accounting for a multi-employer scheme where the employer has entered into an agreement with the scheme that determines how the employer will fund a deficit results in the recognition of a liability for the contributions payable that arise from the agreement ( to the extent that they relate to the deficit ) and the resulting expense in the Statement of Comprehensive Income and Expenditure in accordance with section 28 of FRS 102 . The University is satisfied that USS meets the definition of a multi-employer scheme and has therefore recognised the discounted fair value of the contractual contributions under the recovery plan in existence at the date of approving the financial statements .
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