Notes to the Consolidated Accounts
For the Year Ended 31 March 2012
1 Accounting Policies
(a) Basis of accounting
(b) Incoming resources
All expenditure has been accounted for on an accruals basis.
Expenditure is matched to the income classifications under the headings of Costs of Generating Funds and Costs of Charitable Activities with the additional classification of
Governance rather than the type of expense in order to provide more useful information to users of the accounts.
Costs of Generating Funds and Costs of Charitable Activities comprise direct expenditure including direct staff costs attributable to the activity.
Where costs are unable to be directly attributed they are allocated to activities on a basis consistent with use of the resources in accordance with SORP 2005. The use of
resources for costs not directly attributable to an activity are allocated in accordance with resource use (based on activity income and direct expenditure divided by total
income and direct expenditure).
Governance costs include audit fees and a portion of administration costs. The Governance administration costs are calculated as a percentage of the total administration
costs for the Directorate, Finance Department and Human Resources Department which are not directly attributable to an activity. This allocation includes an apportionment
for the following expenditure:
Salaries - including Pensions and Social Security
Staff Training and Development
Professional Consultancy Fees
Professional Legal Fees
(d) Collection acquisitions (Heritage Assets)
(e) Tangible fixed assets
The Museum capitalises the purchase of assets which cost more than £1,000 (either individually or cumulatively as part of a recognised asset group) and
which have lives beyond the financial year in which they are bought.
All fixed assets are reported at cost less accumulated depreciation, except in the following instance:
- Land and buildings are professionally fully valued every five years; due to the completion of the Sammy Ofer Wing development a full valuation was
undertaken as at 31 March 2012. In the years between full valuations of land and buildings a review based revaluation is undertaken. The next full
valuation is due to be undertaken in 2017.
No revaluation is undertaken for other tangible fixed assets as it is considered that depreciated cost value is appropriate.
Depreciation is provided on all tangible assets, except freehold land, at rates calculated to write off the cost less estimated residual value of each asset on a straight line basis.
For assets under construction, depreciation is not charged until the asset has come into use.
Fixed assets are depreciated from the date of acquisition to the date of disposal.
Indicative asset lives are as follows:
Buildings - Structure 100 years
Buildings - Plant & Machinery 20 years
Buildings - Fit out 20 years
Fixtures and fittings 4 years or 10 years
Equipment, Computers and vehicles 4 years
Impairment of fixed assets
An assessment of whether there is objective evidence of impairment is carried out for all fixed assets at the balance sheet date. A fixed asset is considered to be impaired if
there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event has an
impact on the estimated future recoverable value of the asset that can be reliably estimated. Where there is objective evidence that an impairment loss exists, impairment
provisions are made to reduce the carrying value to the present estimated recoverable value.
The accounts have been prepared under the historical cost convention as modified by the revaluation of tangible fixed assets and the required valuation methods for financial
instruments. The Museum (Group) accounts includes the three Trusts (The Caird Fund, The Development Fund and The No. 3 Trust Fund) and the trading subsidiary,
National Maritime Museum Enterprises Limited (NMME). All figures shown as Charity are comprised of the Group results excluding NMME. The accounts are
consolidated on a line-by-line basis.
Income is classified under the headings of Incoming Resources from Generated Funds and Incoming Resources from Charitable Activities. Grant-in-aid from the Department
for Culture, Media and Sport is recognised in the Statement of Financial Activities in the year that it is received. Lottery and grant income is recognised when the conditions
for its receipt have been met. Donations are recognised on a receipts basis unless there is earlier certainty of amount and entitlement. Commercial income including
sponsorship is recognised upon performance of services rendered in accordance with the contractual terms. Admissions and membership income is recognised as received.
All other income is recognised where there is certainty of receipt and the amount is quantifiable.
The accounts comply with the Statement of Recommended Practice: Accounting and Reporting by Charities (SORP 2005), applicable accounting standards, the requirements
of the HM Treasury's Financial Reporting Manual, Charities Act 1993 and in the case of the subsidiary the Companies Act 1985, and Accounts Direction issued by the
Department for Culture, Media and Sport. The particular accounting policies adopted by the Museum are described below.
In accordance with H.M. Treasury’s Reporting Manual, additions to the collections (that is, heritage assets), acquired since 1 April 2001 are capitalised and recognised in the
balance sheet at the cost or value of the acquisition, where such cost or value is reasonably obtainable and reliable. Objects that are donated to the Museum are valued by
curators based on their knowledge and market value where available. Heritage assets are not depreciated or revalued as a matter of routine.
In respect of the collections that existed at 31 March 2001, reliable information on cost or valuation is not available and cannot be obtained at a cost commensurate with the
benefits to the users of the financial statements. Therefore such assets are not recognised in the balance sheet.
An overview of the collection is given in Note 12.