Determination of Accounting Requirements

Introduction

1.1
This Determination of Accounting Requirements is issued in terms of section 68(1) of the Housing (Scotland) Act 2010 (“the Act”). Section 69 of the Act places a statutory duty on Registered Social Landlords (RSLs) to comply with the Determination.

1.2
In complying with this Determination, RSLs will meet the requirement to submit information in section 3 of the Regulatory Framework.

1.3
If you have any questions about this Determination, please contact the SHR contact person named in your Engagement Plan.

Interpretation

2.1

In this Determination:

“accounting policies” means the specific accounting principles selected and followed by an RSL which are, in the opinion of the governing body of the registered social landlord, appropriate to its circumstances and best suited to present a true and fair view of its results and financial position and which conform with generally accepted accounting practice;

“affordable letting” includes all properties let below market levels along with those that are let for social benefit;

“book value” means the value of an asset as it appears on the statement of financial position;

“costs” means costs net of any recoverable VAT;

“depreciation” means the cost or value of an asset which is used or consumed during the reporting period;

“general needs housing” means housing that is not shared ownership accommodation or supported housing accommodation;

“governing body” means in the case of a company, the board and in the case of a registered society, the management committee;

“historical cost surplus or deficit” means the surplus or deficit if no revaluation has taken place during the reporting period;

“impairment” means a reduction in the recoverable amount of an asset below its carrying value;

“key management personnel” includes those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. This will include governing body members.

“operating costs” means all of the direct and indirect costs associated with an activity, including cost of sales;

“operating surplus or deficit” means the surplus or deficit incurred after running costs are taken into account and before any interest or other finance costs are taken into account;

“person” includes incorporated and unincorporated organisations;

“planned and cyclical maintenance” means costs incurred by the registered social landlord to maintain property that can be planned or contracted for;

“reactive maintenance” means costs incurred by the registered social landlord to maintain property that cannot be planned for;

“registered society” means a society registered under the Co-operative and Community Benefit Societies Act 2014;

“reporting period” means the period to which the statement of comprehensive income relates;

“shared ownership accommodation” means accommodation that is owned jointly by the RSL and the occupant;

“the SORP” means the current Statement of Recommended Practice: Accounting by Registered Social Landlords, issued by the National Housing Federation, the Welsh Federation of Housing Associations and the Scottish Federation of Housing Associations as updated;

“statement of comprehensive income” means the revenue account required for the purposes of:

(a) Section 80(1) of the Co-operative and Community Benefit Societies Act 2014; or

(b) the profit and loss account referred to in section 396(1) of the Companies Act 2006

“statement of financial position” means the balance sheet required for the purposes of:

(a) Section 80(3) Co-operative and Community Benefit Societies Act 2014; or

(b) Section 396(1)(a) of the Companies Act 2006;

“subsidiary” has the same meaning as in section 164 Housing (Scotland) Act 2010;

“supported housing accommodation” means accommodation owned by an RSL and allocated to an individual requiring support to live independently, which is occupied by that individual as the individual’s sole or main residence, but does not include accommodation the primary purpose of which is to provide care rather than housing, or which aims to fulfil a statutory duty other than under housing legislation;

“unit of accommodation” means in the case of supported housing or a hostel accommodation which is provided for one individual and, in any other case, a dwelling;

“voids” means the monetary value of rent lost by an RSL for properties that are not let.

Application of Determination

3.1

This Determination applies to all RSLs with a reporting period which begins on or after 1 January 2015.

Information in specified form

4.1

Any requirement in this Determination to prepare information in a specified form shall be satisfied if it is prepared in a form substantially to the same effect.

Materiality

5.1

Unless stated otherwise, amounts which, in a particular context of any provision of this Determination, are not material may be disregarded for the purpose of that provision.

General accounting requirements

6.1
The financial statements of an RSL shall comply with the requirements of this Determination, SORP (where applicable) and applicable financial reporting standards with respect to the form and content of the statement of financial position, statement of comprehensive income, additional statements and any additional information to be provided by way of notes to the financial statements.

6.2
Nothing in this Determination shall prevent the financial statements giving more information than is required by this Determination.

True and fair view

7.1

The statement of financial position shall give a true and fair view of the state of affairs of the RSL as at the end of the reporting period.

7.2

The statement of comprehensive income shall give a true and fair view of the surplus or deficit incurred by the RSL for the reporting period.

7.3

Where it is necessary to depart from the requirements of this Determination so as to give a true and fair view of the state of affairs of an RSL and of its statement of comprehensive income in accordance with the duties imposed by:
(a) section 396(2) of the Companies Act 2006 in the case of a registered social landlord that is a company, or
(b) section 80(1) and (3) of the Co-operative and Community Benefit Societies Act 2014 in the case of a registered social landlord that is a registered society, then: 

nothing in this Determination shall prevent such a departure but particulars of any such departure, the reasons for it, and its effect, shall be stated in the notes to the financial statements.

Housing activities

8.1
If in the course of the reporting period an RSL has engaged in housing activities in two or more types of accommodation that in the opinion of the governing body differ substantially from each other, the supporting notes to the statement of comprehensive income shall state, in respect of each type:

(a) the amount of the turnover attributable to that type;
(b) the costs attributable to that type; and
(c) the amount of operating surplus or deficit which is in the opinion of the governing body attributable to that type.

8.2
For the purposes of paragraph 8.1, the type of accommodation includes general needs housing, supported housing accommodation and shared ownership accommodation.

Signature on and dating of statement of financial position

9.1
The statement of financial position shall:

(a) show the date on which the financial statements have been authorised for issue by the governing body of the RSL;
(b) be signed on behalf of the governing body by:
(i) a member of the governing body in the case of a company, or
(ii) two members and the secretary of the governing body in the case of a registered society.

Notes to the financial statements

10.1
Every RSL shall include in the notes to its financial statements the information shown in the Schedule to this Determination, together with the corresponding information for its previous reporting period.

10.2
Items listed in the Schedule to this Determination shall not be included if there is no amount to be shown in respect of both the reporting period and the previous reporting period.

Additional statements

11.1
Every RSL must include in the financial statements a statement of cash flows prepared in accordance with the format specified in the SORP.

Schedule

Information to be included in the notes to the financial statements

Part 1

Note 1 – Particulars of turnover, operating costs and operating surplus or deficit