Cathedrals Accounting Regulations

ACCOUNTING AND REPORTING REGULATIONS FOR ENGLISH ANGLICAN CATHEDRALS prepared by the CATHEDRALS ADMINISTRATION AND FINANCE ASSOCIATION
in con !nction "ith the ASSOCIATION OF ENGLISH CATHEDRALS and #peci$ied by the CHURCH COMMISSIONERS !nder Section %& o$ the Cathedra'# Mea#!re ()))
No*e+ber %,,-
Date issued: 10 February 2014
Copie# o$ the#e re.!'ation# +ay be obtained $ro+
the Ch!rch Co++i##ioner#/ Intranet or the Financia' P'annin. Depart+ent Ch!rch Co++i##ioner# Ch!rch Ho!#e Great S+ith Street London S0(P 1N2
A small charge may be levied.
CONTENTS Re.!'ation# (
1.1 1.2 1.#
Pa.e
Introd!ction
Statement by the Church Commissioners re!ace $he regulations% a true and !air vie& and the relationshi' &ith other 'ronouncements )ey to abbreviations used 6 "
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1.4
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2.1 2.2 2.# 2.4 2.2.6 2." 2.( 2.*
Genera'
+ateriality Content and 'ur'oses o! the re'ort and accounts 're'ared under these regulations ,sers o! the re'ort and accounts Summary accounts Com'arative !igures Funds Audit A''roval ublication 10 10 10 11 11 11 11 12 12
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#.1
Entitie# to be inc'!ded in a cathedra'3# con#o'idated acco!nt#

.eneral 1#
#.2 #.# #.4
Aggregation into a cathedral/s entity only accounts Consolidation $ests !or aggregation and consolidation
1# 1# 1#
#.#.6
Control +ethods o! accounting !or entities controlled by the Cha'ter
14 14
Pa.e
#." 0on1coterminous year ends o! entities included in a cathedral/s consolidated accounts 2ntities not controlled by the cathedral Su''lementary in!ormation Choir school 16 1" 1" 1(
#.( #.* #.10
1
4.1 4.2 4.# 4.4 4.4.6 4."
Ann!a' Report
.eneral 3egal and administrative in!ormation Structure% governance and management 4b5ectives Activities% achievements and 'er!ormance Financial revie& lans !or !uture 'eriods 1* 1* 1* 21 21 22 24
4
-.1 -.2
For+at o$ Acco!nt#
.eneral Accounting 'olicies to be disclosed 22-
6.1 6.2 6.#
State+ent o$ Financia' Acti*itie# 5SOFA6

rinci'les Format o! consolidated S4FA and &or6ed e7am'le S4FA: 27'lanation o! &hat to include under individual items 26 #0 #2
&
".1
7a'ance #heet
.eneral #*
".2 ".#
$he cathedral% its ancillary buildings and the inventory ro'erty
#* 40
Pa.e
".4 ".".6 "." ".( ".* ".10 ".11 ".12 De'reciation o! 'ro'erties used !or cathedral 'ur'oses 8nvestments lant% machinery% vehicles% o!!ice e9ui'ment% com'uters% !urniture and !ittings +ovements on !i7ed assets Stoc6 :orro&ings Debtors and creditors ;or6ed e7am'le o! consolidated balance sheet ;or6ed e7am'le o! selected notes to the accounts 41 42 42 42 42 42 4# 44 4-
8
(.1 (.2 (.#
Ca#h $'o" #tate+ent

.eneral ;or6ed e7am'le o! consolidated cash !lo& statement ;or6ed e7am'le o! cash !lo& notes4* 4( 4(
)
*.1 *.2 *.# *.4 *.*.6 *." *.(
Note di#c'o#!re#
Funds Sta!! numbers Sta!! costs 2moluments o! higher 'aid sta!! ensions <elated 'arty disclosures <emuneration o! members o! the Cha'ter 27'enses o! members o! the Cha'ter -0 -0 -0 -0 -1 -1 -2 -#
*.*
Auditors/ remuneration
-#
Pa.e
*.10 *.11 *.12 .uarantees Commitments Consolidated entities -# -4 -4 --6
(, ((
S!++ary acco!nt# G'o##ary
Appendice#
( % 1 9 4 $he !unds o! a cathedral Care o! Cathedrals +easure 1**0 A''lication o! accounting standards to cathedral accounts F<S 1" and 'ension schemes managed by $he Church o! 2ngland ensions :oard ;or6ing 'arty on revie& o! cathedral accounting -* 62 64 "" "*
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INTRODUCTION
State+ent by the Ch!rch Co++i##ioner# ;ith the su''ort o! the Cathedrals Administration and Finance Association and the Association o! 2nglish Cathedrals% the Church Commissioners have s'eci!ied under section 2" o! the Cathedrals +easure 1*** &hat constitutes best 'ro!essional 'ractice and standards relating to the re'ort and accounts o! any cathedral to &hich the +easure a''lies. $he Cha'ter o! any such cathedral shall 're'are accounts =incor'orating an annual re'ort> &hich give a true and !air vie& o! the state o! a!!airs o! the cathedral and its connected entities at the end o! its !inancial year and o! their !inancial activities !or that year. $he accounts are to com'ly in all material res'ects &ith the 0ovember 2006 Accounting and <e'orting <egulations !or 2nglish Anglican Cathedrals and state% in the notes to the accounts% that the accounts so com'ly or describe &hich re9uirements have not been com'lied &ith and give reasons !or the non1com'liance.
$hese re9uirements a''ly to all !inancial years commencing on or a!ter 1 December 2006. 2arlier ado'tion is% ho&ever% encouraged.
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(:% 1.2.1
Pre$ace 8n August 1**6 the Association o! 2nglish Cathedrals =A2C> 'ublished .uidelines on 2nglish Anglican Cathedral Accounts. At the re9uest o! the A2C the Church Commissioners 'rescribed% under section #( o! the Cathedrals +easure 1*6#% the !orm in &hich the accounts o! a cathedral &ere to be 're'ared. $hey &ere to give a true and !air vie& o! the state o! a!!airs o! the cathedral and its connected entities at the end o! its !inancial year and o! their !inancial activities !or that year. $o achieve this they &ere to com'ly in all material res'ects &ith the guidelines. 8n +arch 2002% revised guidelines &ere s'eci!ied. $he guidelines &ere u'dated in the light o! e7'erience o! their use and o! !urther develo'ments in accountancy 'ractice% notably ne& and revised Financial <e'orting Standards% the 'ronouncements o! the ,rgent 8ssues $as6 Force and the revised Statement o! <ecommended ractice ?Accounting and <e'orting by Charities@ issued by the Charity Commission in 4ctober 2000. $he 0ovember 2006 <egulations have been s'eci!ied !ollo&ing a !urther revie& o! the guidelines% ta6ing into account the re9uirements o! the Charities S4< 200-. 8n res'ect o! the accounts o! their cor'orate 'ro'erty held !or ecclesiastical 'ur'oses% Cha'ters are% by virtue o! section *6=2> o! the Charities Act 1**#% sub5ect not to the Charities =Accounts and <e'orts> <egulations 2000 =&hich en!orce the Charities S4< > but to any s'eci!ication as to &hat constitutes best 'ro!essional 'ractice and standards relating to the re'ort and accounts made by the Church Commissioners under section 2" o! the Cathedrals +easure 1***% &hich legislates !or the governance o! cathedrals generally. 8n s'eci!ying these regulations% the Church Commissioners have recognised that cathedrals% although not &ithin the Charity CommissionAs regulatory !rame&or6% are charities and that there!ore the regulations should accord &ith the Charities S4< &herever relevant. $he relationshi' &ith the Charities S4< is described on 'age eight. $he Charity Commission has been consulted during the 're'aration o! these regulations to ensure their com'atibility &ith the recommendations o! the Charities S4< . Any additional re9uirements created by the regulations either re!lect s'eci!ic legislation a''licable to cathedrals or are% in the o'inion o! the Church Commissioners% necessary in the conte7t o! cathedral accounting. 8n res'ect o! any cor'orate 'ro'erty held !or non1ecclesiastical 'ur'oses =!or e7am'le% schools>% Cha'ters may be &ithin the Charity CommissionAs regulatory !rame&or6. 8n res'ect o! registered charities o! &hich they are trustees% Cha'ters are &ithin the Charity CommissionAs regulatory !rame&or6.
1.2.2
1.2.#
1.2.4
(:1 1.#.1
The Re.!'ation#; a tr!e and $air *ie" and the re'ation#hip "ith other prono!nce+ent# $he Cathedrals +easure 1*** re9uires the Cha'ter o! each cathedral to &hich the +easure a''lies to 're'are an annual re'ort and audited accounts &hich sho& a true and !air vie& o! the transactions throughout the year and o! the 'osition at the end o! the year in accordance &ith best 'ro!essional 'ractice and standards. 8t em'o&ers the Church Commissioners to s'eci!y &hat constitutes best 'ro!essional 'ractice and standards relating to the re'ort and accounts. ;ith the su''ort o! CAFA and the A2C% the Church Commissioners have s'eci!ied the !orm o! accounts to be used. $hese regulations are a''licable to a Cha'ter/s cor'orate 'ro'erty held !or ecclesiastical 'ur'oses. $o the e7tent that a Cha'ter controls any other 'ro'erty &hich is !or the bene!it o! the cathedral and &hich !alls &ithin the ambit o! the Charities Acts% or any other legislation% then the accounts relating to any such 'ro'erty should be 're'ared in accordance &ith the a''ro'riate legislation and S4< s in addition to the relevant in!ormation being included in the consolidated accounts 're'ared in accordance &ith these regulations. $he regulations s'eci!y that a cathedral/s accounts should also contain in!ormation about related trusts and other entities &hich are !or the bene!it o! the cathedral/s ministry. A cathedral/s accounts are intended to give a true and !air vie&. $hey must be 're'ared on the going concern assum'tion and the accruals conce't and there is a 'resum'tion that they have been 're'ared in accordance &ith all a''licable F<Ss% SSA s and ,8$F abstracts. $he regulations detail the a''lication o! the Charities S4< to cathedral accounts and also 'rovide !or certain additional disclosures relevant in the conte7t o! cathedral accounting. $he Charity Commission recognises that the recommendations o! the S4< should be ada'ted to meet legislative re9uirements and% as such% are subordinate to any s'eci!ic guidance 'rovided under section 2"=2> o! the Cathedrals +easure 1***. For most cathedrals these regulations 'rovide all the guidance re9uired in order that the accounts should give a true and !air vie&% but re!erence to the Charities S4< may be re9uired% 'articularly &here cathedrals have activities or 'ro'erty !or &hich the accounting treatment &ill be more !ully described in the S4< . 8t may be necessary% in some circumstances% to 'rovide in!ormation additional to that s'eci!ied in the regulations% in order to give a true and !air vie&. Should it be necessary to de'art !rom the regulations in order to give a true and !air vie&% the reasons !or it% and its estimated !inancial e!!ect on the accounts% should be disclosed in a 'rominent note to the accounts. $hroughout these regulations% the &ord BshouldA indicates% as it does in the Charities S4< 200-% a re9uirement &hich must be !ollo&ed. $he regulations describe the minimum amount o! in!ormation to be included in a cathedral/s re'ort and accounts. $hey should not be construed as 'reventing the 'rovision o! additional in!ormation i! this is thought desirable or &here it is re9uired under a cathedral/s o&n statutes.
1.#.2
1.#.#
1.#.4
1.#.-
1.#.6
(:9
<ey to Abbre*iation# !#ed
A2C AS: CAFA F<S S4FA S4< SSA ,8$F
Association o! 2nglish Cathedrals Accounting Standards :oard Cathedrals Administration and Finance Association Financial <e'orting Standard Statement o! Financial Activities Statement o! <ecommended ractice Statement o! Standard Accounting ractice ,rgent 8ssues $as6 Force
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GENERAL
Materia'ity $he 'rovisions o! these regulations should only be a''lied to items and entities material in the conte7t o! the cathedralAs o'erations. $his should be borne in mind at all times in reading and a''lying these regulations.
%:% 2.2.1
Content and p!rpo#e# o$ the report and acco!nt# prepared !nder the#e re.!'ation# $he re'ort and accounts should give a true and !air vie& o! the Cha'ter/s ste&ardshi' o! the resources &hich are under its control and are !or the bene!it o! the cathedral/s ministry. $hey should also contain in!ormation about those trusts and other connected entities% &hich are !or the bene!it o! the cathedral but not under the control o! the Cha'ter% e.g. Friends.
2.2.2 $he cathedral/s annual re'ort and accounts should contain the !ollo&ing statements: Annual re'ort <e'ort o! the auditors Consolidated statement o! !inancial activities =S4FA> Consolidated balance sheet 2ntity only balance sheet Cash !lo& statement% i! re9uired by F<S 1 Accounting 'olicies 0otes to the accounts.
2.2.# Cash !lo& statements are% !or many cathedrals% unli6ely to di!!er materially !rom the S4FA and !or this reason are% unless re9uired by F<S 1 on account o! the siCe o! income or net assets =see A''endi7 #>% included in the o'tional category. 8!% ho&ever% such a statement &ould give signi!icant additional in!ormation then it should be 'resented. 8n 'articular% a cash !lo& statement &ill be use!ul &here there have been signi!icant transactions o! an investing or !inancing nature. 2.2.4 Consistency o! treatment and 'resentation bet&een cathedrals and !rom year to year &ill be hel'!ul to users o! a cathedral/s annual re'ort and accounts &ho &ant to ma6e com'arisons bet&een cathedrals or to in!orm decisions on the allocation o! grants bet&een them =e.g. 2nglish Deritage% the Church Commissioners>. U#er# o$ the report and acco!nt# 8n 're'aring its annual re'ort and accounts the Cha'ter should consider the needs o! those &ho &ill use them. Such users &ill include: the Council% the Cha'ter and the College o! Canons the cathedral community and congregation
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11
%:9
the Church Commissioners the Association o! 2nglish Cathedrals diocesan bodies !und 'roviders other cathedrals grant 'roviders and lenders o! !unds the general 'ublic
S!++ary Acco!nt# Some users may 're!er summary accounts to the cathedral/s !ull annual re'ort and accounts. $his sub5ect is considered in section 10.
%:4
Co+parati*e $i.!re# For every item sho&n in the cathedral/s S4FA% balance sheet and cash !lo& statement% either on the !ace o! the relevant statement or in the notes thereto% the corres'onding amount !or the 'receding !inancial year should be sho&n. revious year/s !igures only need to be 'rovided !or total !unds against each heading in the S4FA and balance sheet. ;here that corres'onding amount is not com'arable &ith the amount !or the current year% the amount 'reviously disclosed should be ad5usted and 'articulars o! the ad5ustment and the reasons !or it should be disclosed in a note to the accounts.
%:2.6.1
F!nd# Funds should be analysed in the S4FA and on the balance sheet bet&een unrestricted% designated =i! disclosed se'arately: see 'aragra'h 6.2>% restricted and endo&ment.
Se'arate sets o! statements may be 'roduced !or each ma5or !und and lin6ed to a total summary. $he Cha'ter should decide on the most suitable !orm o! 'resentation. 2.6.2 %:& 2.".1 A''endi7 1 e7'lains the legal 'osition relating to these !unds. A!dit $he accounts should be inde'endently audited by an auditor &ho is a !irm or individual &ho may% under section 4# o! the Charities Act 1**#% audit the accounts o! a charity. A 'artner or em'loyee o! the auditor should not be a member o! any o! the bodies com'rising the cor'orate body. $he auditorAs terms o! engagement should be agreed in &riting &ith the Cha'ter o! the cathedral% at least every three years.
2.".2
12
2.".#
$he audit should be conducted in accordance &ith ractice 0ote 11 =<evised>: $he Audit o! Charities% issued by the Auditing ractices :oard. $he re'ort o! the auditor should be addressed to the members o! the Cha'ter o! the cathedral. $he auditor &ill 'roduce a management letter addressed to the Cha'ter at the conclusion o! each yearAs audit or the con!irmation that none is re9uired. $his should be 'resented to a meeting o! Cha'ter. Appro*a' $he cathedral/s accounts should be a''roved by the Cha'ter o! the cathedral and the balance sheet signed and dated on its behal! by the Dean and another authorised member o! Cha'ter. $he annual re'ort should be dated and signed by the Dean on behal! o! the Cha'ter. P!b'ication $he annual re'ort and accounts should be audited% a''roved and 'ublished &ithin seven months o! the end o! the !inancial year end. ublication means that: the availability o! the accounts should be 'ublicised by such means as 'rominent notices in the cathedralE and the accounts should be sent to the Church Commissioners and anyone &ho re9uests a co'y.
2.".4
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2.(.2 %:)
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1:(
ENTITIES TO 7E INCLUDED IN A CATHEDRAL3S CONSOLIDATED ACCOUNTS

Genera' 8n order to give a com'rehensive and realistic 'icture o! all the resources available to the Cha'ter in its running o! the cathedral% it is necessary to 're'are accounts &hich deal not only &ith the cathedral entity% but also other entities that are analogous to the subsidiaries and associates o! a commercial com'any. $hese are called connected entities and are all those trusts% com'anies or other entities &hich are either: controlled by the Cha'terE or% i! not controlled by the Cha'ter% !or the bene!it o! the cathedral =in &hole or in 'art% or &here the bene!it is discretionary>.
Associates and 5oint ventures &hich are !or the bene!it o! a cathedral are also connected entities. 1:( A..re.ation into a cathedra'3# entity on'y acco!nt# Section *" o! the Charities Act 1**# is clear that s'ecial trusts administered by a charity !or any s'ecial 'ur'oses o! the charity do not constitute a se'arate charity !or the 'ur'oses o! the charity accounting regulations. $hese regulations re9uire the same a''roach to be ta6en to&ards trusts administered by the Cha'ter &hich e7ist !or a 'ur'ose &hich is also a 'ur'ose or ob5ective o! the cathedral. An e7am'le is an a''eal !und !or% say% cathedral restoration% &hich is administered by the Cha'ter or their a''ointees% &hether or not it is registered &ith the Charity Commission. Such trusts should be regarded as 'art o! the cathedral entity and included in restricted !unds in the entity only% as &ell as the consolidated% accounts. 1:1 Con#o'idation ;here a''ro'riate =see sections #.4 to #.6> sho's% restaurants and other non1charitable trading entities% and charitable entities% &hich bene!it the cathedral/s ministry and are controlled by the Cha'ter should be consolidated on a line1by1line basis as set out in F<S 2% i.e. in the statement o! !inancial activities% in 'lace o! any amount received or receivable !rom the entity% should be sho&n the entity/s income and e7'enditure consolidated on a line by line basisE and in the balance sheet% in 'lace o! the cathedral/s investment in the entity% should be sho&n the entity/s assets and liabilities consolidated on a line1 by1line basis.
1:9 #.4.1
Te#t# $or a..re.ation and con#o'idation 8t &ould be incorrect to aggregate or consolidate entities &hich% although !or the bene!it o! the cathedral% are not controlled by the Cha'ter. Do&ever% in!ormation
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about such entities is necessary in order to give a rounded vie& o! the resources 'otentially available and so su''lementary in!ormation about such entities should be included in the notes to the cathedral/s consolidated accounts% as set out in 'aragra'hs #.*.2 and #.*.#. #.4.2 8n deciding &hat entities to include in a cathedral/s entity only and consolidated accounts% and &hat in!ormation to 'rovide about them% t&o !actors re9uire consideration each year: 1:4 Contro' Control; in the conte7t o! the relationshi' bet&een the Cha'ter and a connected entity% means the ability to direct the !inancial and o'erating 'olicies o! the other entity &ith a vie& to bene!iting !rom its activities. Control may e7ist through: holding a ma5ority o! the voting rights in the entity being the trustees having the right to a''oint and remove directors or trustees holding a ma5ority o! the voting rights at board or trustees/ meetings or having the right to e7ercise% or actually e7ercising% a dominant in!luence over the other entity. Does the Cha'ter control the entityF $o &hat e7tent is the entity !or the bene!it o! the cathedral/s ministryF
Control may be e7ercised directly or indirectly by the Cha'ter acting through other individuals or entities &ho are under the control o! the Cha'ter and &ho in turn control the connected entity. 1:#.6.1 Method# o$ acco!ntin. $or entitie# contro''ed by the Chapter 0ho''y $or the bene$it o$ the cathedra'3# +ini#try GFor the bene!it o! the cathedral/s ministryG means !or the direct or indirect bene!it o! the 'hysical !abric o! the cathedral or its community or any o! the activities normally and usually carried out by a cathedral =e.g.% the conduct o! services% including the 'rovision o! music% charitable giving% social &el!are% 'roviding !or visitors and tourists% education% !und raising !or the cathedral% 'roviding services to the diocese>. 8! such an entity is a s'ecial trust as de!ined in 'aragra'h #.2% its results should be included in restricted !unds in the cathedral/s entity only and consolidated accounts. 4ther entities should be consolidated. #.6.2 Partia''y $or the bene$it o$ the cathedra'3# +ini#try G artially !or the bene!it o! the cathedral/s ministryG means 'artly !or the bene!it o! the cathedral and 'artly !or the bene!it o! other 'arties. $he e7tent o! the cathedral/s !inancial bene!it is 'redetermined =by a !i7ed 'ro'ortion or amount> and not discretionary. $his situation is li6ely to arise in t&o circumstances:
1-
&here the Cha'ter is trustee o! a trust set u' to bene!it the cathedral and a non1cathedral 'ur'ose =!or e7am'le% an a''eal &here it is stated that% say% "-H o! the money &ill go to the cathedral restoration and 2-H to some other 'ur'ose not bene!iting the cathedral/s ministry>. $his situation &ould re9uire s'eci!ic terms in the governing document or a''eal s'eci!ying the allocation o! income =and o! assets in the event o! &inding u'> and is there!ore unli6ely to be !re9uently encountered. Such a trust &ould be registered &ith the Charity Commission and se'arate accounts &ould be 're'ared !or it in accordance &ith the Charities S4< . 8n the cathedral accounts the gross e9uity method =as de!ined in F<S *> should be used to include% in the consolidated statement o! !inancial activities% the cathedral/s share o! the gross income% o! net income and o! any gains or losses on sales and revaluations o! assets and% in the consolidated balance sheet% the cathedral/s share o! gross assets and gross liabilities. ;here the income or net assets are restricted to 'articular 'ur'oses then the 'resentation &ill be as restricted !unds. $his method is described in 'aragra'h 416 o! the Charities S4< .
&here the cha'ter holds a ma5ority o! the voting rights =but less than 100H o! the shares> in a trading subsidiary. 8n this case consolidation =sho&ing a minority interest> under the normal rules o! F<S 2 is re9uired. #.6.# 7ene$it di#cretionary G:ene!it discretionaryG means that the e7tent to &hich the trust or !und bene!its the cathedral is entirely &ithin the Cha'ter/s discretion. 8n such situations the ob5ectives o! the trust% &hile allo&ing su''ort o! the cathedral/s ministry% &ould also allo& other 'ur'oses to bene!it. $he allocation o! income to the cathedral or the other 'ur'oses &ould be at the discretion o! the Cha'ter. :ecause o! the 'otential con!licts o! interests this &ill be an unusual eventuality. For such an entity !ull consolidation is re9uired. =G:ene!it discretionaryG is not the correct classi!ication &here an entity is &holly or 'artially !or the bene!it o! the cathedral and its trustees or directors have discretion only as to &hat as'ects o! the cathedral should bene!it andIor the timing o! the bene!its. Such an entity remains &holly or 'artially !or the bene!it o! the cathedral.> #.6.4 No bene$it Some entities can be controlled by the Cha'ter but are not !or the bene!it o! the cathedral =e.g. almshouses% or a school% but see section #.10>. For such entities% se'arate accounts should be 're'ared under the relevant re9uirements and they should also be listed in a note to the cathedral/s accounts together &ith a statement that their activities have not been included in the accounts. #.6.S!++ary o$ the acco!ntin. treat+ent o$ connected entitie# 8n summary% the accounting treatment o!% and the in!ormation 'rovided on% connected entities should be as !ollo&s:
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Le*e' o$ bene$it to the cathedra'3# +ini#try
Contro''ed by the Chapter= >e# No 8JSJ3 8JSJ3 8J3
;hole artial Discretionary 0one
A or C J 3 .2 J 3 , =C J 3> 3
A K C K .2 K 8 K 3 K S K , K
Aggregate =a''licable to s'ecial trusts> Consolidate .ross e9uity account =a''licable to trusts &ith s'eci!ic distribution 'rovisions> 8nclude only income receivable 3ist in the notes to the cathedral/s accounts rovide su''lementary in!ormation ,nli6ely to occur because o! 'otential con!licts o! interest. 8! it does occur% then consolidate and list. ?oint @ent!re# $hese are entities !ormed to carry out a =usually trading> venture 5ointly &ith another 'arty or 'arties and in &hich control is shared. $he cathedral should use the gross e9uity method =as de!ined in F<S *> to disclose% in the consolidated S4FA% its share o! turnover% net income and any gains or losses on sales and revaluations o! assets and% in the consolidated balance sheet% its share o! gross assets and gross liabilities. $his method is described in 'aragra'h 414 o! the Charities S4< .
#.6.6
#.6."
A##ociate# $hese are entities in &hich the Cha'ter holds a 'artici'ating interest =i.e. more than 5ust a shareholding> and uses it to e7ercise signi!icant management in!luence. $he cathedral should use the net e9uity method =as de!ined in F<S *> to disclose% in the consolidated S4FA% its share o! the associateAs net o'erating 'ro!it or loss and o! any other gains or losses and% in the consolidated balance sheet% its share o! the associateAs net assets. $his method is described in 'aragra'h 41# o! the Charities S4<
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NonAcoter+ino!# year end# o$ entitie# inc'!ded in a cathedra'/# con#o'idated acco!nt# $he Cha'ter should ensure that all material entities to be included in the cathedralAs accounts 're'are their audited accounts !or the same 'eriod and to the same date and using the same accounting 'olicies. 8! that is not 'ossible then the audited accounts o! the entity concerned !or the year that ended in the three months 'rior to the date o! the
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cathedral/s accounts should be used and the 'eriod covered by them should be disclosed. 8! there are no such accounts% then the cathedral should use s'ecial interim accounts 're'ared by the entity concerned !or the same year as the cathedral. 8! that is not 'ossible% then the most recently available accounts !or the entity should be used and the 'eriod covered by them should be disclosed. 1:8 Entitie# not contro''ed by the cathedra' 4nly income receivable should be included in the cathedral/s accounts !rom entities not controlled by the Cha'ter: e.g. the Friends o! the Cathedral% or an a''eal or other trust &ith inde'endent trustees. $his does not include a''eals managed by !undraisers or agents on behal! o! the Cha'ter. 1:) #.*.1 S!pp'e+entary in$or+ation Connected entities should be listed in the notes to the cathedral/s consolidated accounts. Similar entities may be grou'edE only material entities need be disclosed se'arately. For each material connected entity the list should state its name% its relationshi' &ith the cathedral and the degree o! control e7ercised% an indication o! its economic im'ortance to the cathedral =e.g. its ca'ital% turnover and results> and 'articulars o! any audit 9uali!ication. $he list should indicate ho& each entity has been dealt &ith in the cathedral/s accounts =e.g. aggregated% consolidated% gross e9uity accounted% e9uity accounted% only income receivable credited% or e7cluded>. $o the e7tent that any entity has a material im'act on a cathedral/s !inances% it should be covered in the annual re'ort and commentary on the accounts.
#.*.2 8n the case o! non1controlled entities% only income receivable !or the year is to be included in the cathedral/s accounts. As this !igure has the 'otential to !luctuate considerably !rom one year to another% it may by itsel! give a misleading 'icture o! the longer1term bene!it to the cathedral !rom such entities. For entities not controlled by the cathedral but &holly or 'rinci'ally !or its !inancial bene!it =e.g. Friends>% cathedrals should disclose summarised accounts !or each material entity% giving: gross income net income amount 'aid or 'ayable to the cathedral =i.e. the amount included in the cathedral/s consolidated accounts> gross assets and net assets.
$here should also be an indication as to &hether the relevant accounts have been audited. 8! the audit re'ort &as 9uali!ied or contained an e7'lanatory 'aragra'h% the nature o! the 9uali!ication or e7'lanation should be disclosed. #.*.# 8n order to 'ut the year/s income !rom other non1controlled entities into a broader conte7t% there should be 'rovided the income receivable !rom the entity in the current year and the 'revious t&o years and any income 'romised !or the ne7t year.
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1:(,
Choir #choo'
#.10.1 2ach cathedral &ith a choir or other related school should decide into &hich o! the categories summarised in 'aragra'h #.6.- the school best !its and should disclose the treatment ado'ted. 8t is not 'ossible to say categorically &hether schools should or should not be consolidatedE the !ollo&ing 'oints may hel' in determining this: the 'rimary determinants are control and 'ur'ose the cor'orate structure =i.e. trust% limited com'any etc.> o! the school is not a determining !actor o&nershi' &ithout control =unli6ely but 'ossible> does not 'ermit consolidation. i! the Cha'ter controls the school =either by having the right to a''oint a ma5ority o! the directors or governors or because the school/s governing document gives the Cha'ter signi!icant 'o&ers>% consolidation is re9uired i!: o the Cha'ter regards the running o! the school as 'art o! the ministry o! the cathedralE or o any !inancial sur'lus can be 'assed to the cathedral i! any ultimate de!icit must be borne by the cathedral% this means that the school must be included in the cathedral/s entity accounts =see 'aragra'h #.2>.
#.10.2 ;here a school% even though controlled by the Cha'ter% is not considered to be 'art o! the cathedral/s ministry and the cathedral has no right to any !inancial sur'lus nor obligation in relation to any !inancial de!icit% then the school/s results should not be consolidated and any contribution andIor !ees 'aid to the school &ill be sho&n in the statement o! !inancial activities under music or education as a''ro'riate. #.10.# 8! the school buildings are o&ned by the Cha'ter and the school is classi!ied as being Gnot !or the bene!it o! the cathedralG then those buildings should be treated as a se'arately disclosed investment 'ro'erty and the rent receivable sho&n as a se'arately disclosed 'art o! 'ro'erty income =see 'aragra'h ".#.">.
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9 THE ANNUAL REPORT

9:( Genera' $he cathedral/s annual re'ort should be 'roduced in a !ormat a''ro'riate to the cathedral concerned. 8t should contain a revie& o! activities and commentary on the accounts that 'rovides an ob5ective discussion that analyses and e7'lains the main !eatures underlying the !inancial results and 'osition. +any o! the users o! cathedrals/ accounts are not versed in understanding accounts. For them% the re'ort should ma6e the accounts intelligible. For the Dean and the Cha'ter% it 'rovides an o''ortunity to e7'lain in clear and sim'le terms &hat has ha''ened over the 'ast year% their !uture 'lans and the resources needed. 9:% Le.a' and ad+ini#trati*e in$or+ation $he cathedral/s annual re'ort should contain the !ollo&ing in!ormation: $he !ull legal name o! the cathedral and any other name commonly used $he address o! the cathedral o!!ice $he names o! the members o! the Cha'ter and the e7ecutive 'osts held by them L $he name o! the administrator $he names o! the surveyor to the !abric =being the architect a''ointed under the Care o! Cathedrals +easure 1**0> and the archaeologist $he names o! the members o! the !inance committee L $he names o! the members o! the !abric advisory committee L $he name o! the director o! music or organist $he name and address o! the cathedral auditors $he names and addresses o! the cathedral/s ban6ers% solicitors% accountants% stoc6bro6ers% architectsE and any other 'ro!essional advisors used during the year. L on the date the re'ort &as a''roved and also those &ho retired or resigned since the start o! the relevant !inancial year 9:1 4.#.1 Str!ct!re; .o*ernance and +ana.e+ent $he !ollo&ing in!ormation should be included in the Annual <e'ort: $he nature and date=s> o! the cathedral/s governing statute=s> A descri'tion o! the role o! the cathedral &ithin the diocese A descri'tion o! the organisational structure o! the cathedral and ho& the cathedral is managed. $his &ill need a descri'tion o! the three institutions =the Council% the Cha'ter and the College o! Canons> com'rising the cor'orate body and o! the Finance Committee. $he roles o! each% and o! the :isho'% as set out in 'aragra'hs #% 4% - and * o! the Cathedrals +easure 1***% should be brie!ly e7'lained. 8t is not re9uired to name any
20
individual =e7ce't as re9uired by 'aragra'h 4.2>% though some might &ish to do so. A statement regarding the relationshi's bet&een the cathedral and other organisations &ith &hich it co1o'erates in the 'ursuit o! its ob5ectives Details o! the method o! a''ointing members o! Cha'ter indicating &ho is entitled to a''oint olicies and 'rocedures ado'ted !or the induction and training o! ne& members o! Cha'ter Changes in senior clerical and lay a''ointments A statement o! the res'onsibilities o! the Cha'ter =see 'aragra'h 4.#.2 !or an illustrative statement> 8! relevant% a summary o! the cathedral/s investment 'o&ers given by the Cathedrals +easure 1*** =see 'aragra'h 4.#.# !or the relevant section o! the +easure>. A statement con!irming that the ma5or ris6s to &hich the cathedral is e7'osed have been revie&ed and that systems have been established to mitigate those ris6s.
4.#.2 8llustrative Statement o! the <es'onsibilities o! the Cha'ter $he Cha'ter is res'onsible under re9uirements laid do&n by the Church Commissioners under the 'o&ers given to them by Section 2" o! the Cathedrals +easure 1*** !or 're'aring and 'ublishing an annual re'ort and audited accounts &hich give a true and !air vie& o! the !inancial activities !or each !inancial year and o! the assets% liabilities and !unds at the end o! each !inancial year o! the cathedral and its connected entities stating that they have com'lied in all material res'ects &ith the regulations on the sub5ect 're'ared by CAFA or describing &hich recommendations have not been com'lied &ith and giving reasons !or the non com'liance selecting suitable accounting 'olicies and then a''lying them consistently ma6ing 5udgements and estimates that are reasonable and 'rudent 6ee'ing 'ro'er accounting records !rom &hich the !inancial 'osition o! the cathedral can be ascertained &ith reasonable accuracy at any time% and sa!eguarding the assets o! the cathedral and ta6ing reasonable ste's !or the 'revention and detection o! !raud and other irregularities.
4.#.#
$he 8nvestment o&ers given by section 16 o! the Cathedrals +easure 1*** Cathedrals &ith land and investments on their balance sheet should 'rovide a note o! their investment 'o&ers. $hese are set out in section 16 o! the Cathedrals +easure 1*** and may be summarised as !ollo&s. 8nvestment o&ers ,nder the Cathedrals +easure 1*** the Cha'ter may invest the cathedral/s !unds in any o! the !ollo&ing:
21
3and Funds administered !or the Central :oard o! Finance o! the Church o! 2ngland by CC3A 8nvestment +anagement 3td. 8nvestments in &hich trustees may invest under the general 'o&er o! investment in the $rustee Act 2000 $he im'rovement or develo'ment o! 'ro'erty belonging to the cathedral% e7ce't that endo&ment !unds may not be used to im'rove or develo' the cathedral itsel! and its ancillary buildings.
9:9
Ob ecti*e# $he re'ort should set out the cathedralAs mission statement and summarise the &ays in &hich the Cha'ter im'lements it. $he main 'riorities !or the year should be outlined in the re'ortE this in!ormation could come !rom the management 'lan. $here should be re!erence to the 'lans !or the ne7t year as re'orted in the 'revious year =see 'aragra'h 4."> and comments given !or any substantial changes.
9:4 4.-.1
Acti*itie#; achie*e+ent# and per$or+ance $he revie& o! the activities o! the cathedral should include all material entities included in the consolidated accounts. $he activities included in the re'ort should% as a minimum% include those listed on the !ace o! the S4FA under B<esources e7'ended on missionA as &ell as any 'articularly signi!icant items in the su''orting notes. Accordingly% the !ollo&ing headings &ould normally be included in this section: +inistry Cathedrals and 'recincts u'6ee' 2ducation and outreach Community% 'arish and congregation Additions to cathedral buildings Additions to statutory inventory% and dis'osals !rom it ='aragra'hs ".2.4 to ".2.6>.
;ithin these headings it may be a''ro'riate to comment on: Cathedral events Diocesan events in the cathedral $he number attending services% and the number and ty'e o! services and other events held $he numbers o! visitors $he e7tent o! diocesan and other e7tra1cathedral activities underta6en by cathedral clergy and sta!!. $here should be no notional charge in the accounts !or the time s'ent on e7tra1cathedral activities. 8! actual income is received% then it should be sho&n under an a''ro'riate heading. $he use o! volunteers by the Cathedral should be e7'lained. ;hilst it is not 'racticable !or an economic value to be attached to the &or6 o! volunteers% it is nevertheless im'ortant !or readers to be su''lied &ith
22
su!!icient in!ormation to understand the role and contribution o! volunteers. 4.-.2 4.-.# rogress on achieving the main 'riorities should be re'orted% and 9uanti!ied i! a''ro'riate. $his section should also include re'orts on the !ollo&ing% i! a''licable: 9:4.6.1 $he nature o! any im'ortant events a!!ecting the cathedral A statement covering the 'rogress o! raising and s'ending money on ma5or a''eals +a5or &or6s to the !abric o! the cathedral.
Financia' re*ie" $he re'ort should contain a revie& o! the !inancial 'osition o! the cathedral and the other entities consolidated &ith it. Statements to be included are: A statement o! the cathedral/s 'olicies in relation to its reserves held in its unrestricted !unds and their 'ur'oses =i.e. ho& they came into e7istence and &hat they are no& !or> ;here !unds are in de!icit an e7'lanation &hy they are in de!icit and &hat action is to be ta6en on them 8nvestment 'olicy and 'er!ormance against that 'olicy and against a''ro'riate benchmar6s 8n res'ect o! investment 'ro'erty% an analysis o! rents receivable% ma5or categories o! e7'enditure and gains or losses on dis'osals and revaluation 8n res'ect o! other investments% gross income !rom stoc6 e7change investments and cash de'osits% investment management costs and gains or losses on dis'osals and revaluation $otal return !igures !or both 'ro'erty and other investments should be disclosed. aragra'h 4.6.4 'rovides a detailed e7am'leE each cathedral should determine the amount o! detail a''ro'riate to its o&n circumstances 8n res'ect o! stoc6 e7change investments% a commentary should be given on the 'er!ormance and management o! the cathedral/s investments in the conte7t o! the movements in the relevant stoc6 mar6et indices and in!lation A rolling !ive year !orecast o! the cost o! maintaining and conserving the cathedral and its 'recincts% disclosing the basis on &hich this is calculated. $he annual re'ort should describe both committed% and 'lanned but as yet uncommitted% !uture e7'enditure on re'airs% restoration and maintenance.
4.6.2
Further items on &hich it may be a''ro'riate to comment include: $he level o! voluntary income% both !rom the congregation and !rom other gi!ts +a5or sources o! !inance =e.g. legacies% grants> $he results o! trading o'erations
2#
4.6.#
ro'erty =see section ".#> $he e7tent o! any material donated assets% goods or services% and ho& they have been dealt &ith in the accounts =see 'aragra'h 6.1>
A !ive year summary o! 6ey !igures and ratios should be included. $his &ill give a 'icture o! trends over the longer term and hel' to 'ut in 'ers'ective the results o! the current year% &hich may contain unusual and one1o!! items or !ollo& an e7ce'tional year. Set out belo& are e7am'le calculations o! the total return on investment 'ro'erty and on other investments: ( Tota' ret!rn on in*e#t+ent property .ross rents receivable Service charge income .ross income !rom investment 'ro'erty <ents 'ayable <e'airs and maintenance 4ther 'ro'erty running costs Service charge e7'enditure Service charge liability Agents commission Maluation !ees <ents &ritten o!! as irrecoverable 3egal e7'enses De'reciation and amortisation $otal 'ro'erty management and rental collection costs 0et income !rom investment 'ro'erty 3osses on revaluations and dis'osals o! investment 'ro'erties $otal return on investment 'ro'erty =-> =##> =#-> =1-6> =2> ="> =14> =2> =2> =1> =2-"> 64# =#6#> 2(0 B,,, "-0 1-0 *00
4.6.4
Tota' ret!rn on other in*e#t+ent#
EC!itie# B,,,
FiDed intere#t B,,, 420 "0 =1> =2->
@ariab'e intere#t B,,,
Tota' B,,, 122* 164 =-> =24*>
.ross income !rom other investments 3isted in the ,) 3isted overseas ,nlisted Cash de'osits 8nvestment management costs 3osses on revaluations and dis'osals o! investments
(0 *0 =4> =224>
4 4
24
$otal return on other investments
=1#(>
44
=*0>
9:&
P'an# $or $!t!re period# A summary o! the cathedral/s 'rinci'al aims and ob5ectives !or the ne7t year and any longer1term 'lans !or !uture years should be given.
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4
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ACCOUNTS FORMAT
Genera' Sources and a''lications o! !unds% assets and liabilities and cash !lo& should be sho&n under the headings and in the order in the e7am'les in sections 6.2% ".11 and (.2. A !urther analysis o! any material item in the statement o! !inancial activities or balance sheet should be 'rovided in the notes. 8ndividual items may be sho&n either on the !ace o! the relevant statement or in the notes to the accounts &ith an aggregation o! similar items on the !ace o! the relevant statement.
4:%
Acco!ntin. po'icie# to be di#c'o#ed Cathedrals must describe% in a note to the accounts% the accounting 'olicies that have been !ollo&ed in their 're'aration% and in 'articular should state &hether they have been dra&n u' in accordance &ith these regulations% and a''licable accounting standards. F<S 1( e7'lains ho& accounting 'olicies should be determined. Any de'artures !rom these regulations% or a''licable accounting standards. should be 5usti!ied and e7'lained and the !inancial e!!ect 9uanti!ied. 27am'les o! accounting 'olicies &hich are es'ecially relevant to cathedrals and &hich should be described% &here the amounts in the current or 'receding year are material% include the !ollo&ing: Funds $hird 'arty% and non cash% recei'ts and 'ayments% and donated assets 3egacies <e'airs% restoration and maintenance o! the cathedral $he cathedral and its inventory ro'erty 8nvestments .rants ensions $he nature o! costs allocated to governance costs in the S4FA $he a''ortionment o! su''ort costs% including any estimation techni9ues.
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STATEMENT OF FINANCIAL ACTI@ITIES 5SOFA6

Princip'e# Genera'
6.1.1
$he consolidated S4FA should sho& all in!lo&s and out!lo&s o! resources to and !rom the entities included in the cathedral/s consolidated accounts together &ith trans!ers to and !rom !unds. A S4FA combines a traditional income and e7'enditure account &ith the statement o! total recognised gains and losses re9uired by F<S # and a movement o! !unds statement. 8t should 'ortray in summary !orm &here resources have come !rom% &hat they have been used !or% and &hich !unds have been a!!ected.
6.1.2 Inco+in. re#o!rce# Grant#; donation# 5o$ ca#h or a##et#6 and 'e.acie#
.rants% donations =&hether o! cash or o! assets> and legacies that are sub5ect to conditions or restrictions are described in the !ollo&ing 'aragra'hs under the generic term Grestricted amountsG. <estricted amounts should be credited in the S4FA to the restricted or endo&ment !und as a''ro'riate as soon as they become receivable and irres'ective o! &hen the related e7'enditure &ill be incurred. 8! it is 'ossible that a restricted amount &ill have to be re'aid because certain conditions have not been met% then it should be sho&n as a liability% not credited to the S4FA. 8t &ill be trans!erred to the S4FA in the year in &hich the conditions are satis!ied. 8! material% details o! its recei't should be disclosed in the notes. ;here a donor im'oses a condition that a grant may not be e7'ended until a !uture 'eriod% the recei't should be treated as de!erred income and recogniCed as a liability until the accounting 'eriod in &hich the grant may be e7'ended. ;hen incurred% the related e7'enditure should be charged to the restricted !und in the S4FA% unless it is ca'italised &hen it should be sho&n under the a''ro'riate ca'tion in the balance sheet. A''ro'riate e7'lanations in the notes and the annual re'ort should also be 'rovided. ;hen a restricted amount relates to the 'urchase o! a de'reciable !i7ed asset% the receivable amount should be credited to the restricted !und o! the S4FA and an amount should be debited to the restricted !und each year in res'ect o! the de'reciation o! the asset. Cathedra' b!i'din. and in*entory addition#
8ncome received !or additions to the cathedral building or the inventory should be included &ith voluntary income or grants receivable as a''ro'riate. $he 'roceeds !rom dis'osals !rom the inventory should be included &ith other incoming resources. Details &ill be included in the note on net inventory transactions =see 'aragra'h ".12% note 4>.
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Gi$t Aid and reco*erab'e inco+e taD
$a7 recoverable under .i!t Aid should be se'arately identi!ied under voluntary income =congregational collections and giving and donations> and income !rom activities generating !unds =entrance charges>. 8ncome ta7 recoverable on interest receivable may be identi!ied as a se'arate item and should be included &ith the source o! income in calculating the !igures sho&n on the !ace o! the S4FA. Third party receipt# and pay+ent#
;here !unding is 'rovided on behal! o! the cathedral by third 'arties =e.g. =a> the !unding by the Church Commissioners% the diocese or other bodies o! sti'ends and associated 'ayroll costs o! the Dean% Commissioners/ canons or other clerical or lay sta!!% or =b> 'ayments by the Friends o! the cathedral> then these should be sho&n under both income and e7'enditure and suitably classi!ied and described. Donated #er*ice# and $aci'itie#
A cathedral may receive assistance in the !orm o! donated !acilities% bene!icial loan arrangements% donated services or services !rom !riends and volunteers. $he rules !or determining the value o! this intangible income to be included in the S4FA are: 8! another 'arty is bearing the !inancial cost o! the resources su''lied and the cost to the third 'arty o! 'roviding them is 9uanti!iable% then that is the value to be used. =$his &ill not normally a''ly to commercial discounts e7ce't &here they are clearly intended as a donation.> ;here this in!ormation is not available or i! the cathedral considers the value to be less than the costs borne by the third 'arty% a reasonable estimate o! the gross value to the cathedral should be used. An e9uivalent amount should be included as e7'enditure under the a''ro'riate heading in the S4FA ;here there is no !inancial cost borne by another 'arty !or the 'rovision o! the assistance =e.g. in the case o! Friends and volunteers> the intangible income should not be included in the S4FA.
;hether or not the bene!it is 9uanti!iable and included in the accounts% it should be ac6no&ledged and described in the annual re'ort =see 'aragra'h 4.6.2>. Gi$t# in Eind
;here investments% 'ro'erty or other assets are donated to the cathedral% or are sold to it at less than mar6et value% then the di!!erence bet&een the mar6et value and the cost to the cathedral% i! any% should be sho&n as income in the S4FA% in the column=s> !or the !und=s> to &hich the gi!t &as made. 8! it is not 'racticable to estimate a mar6et value !or a donated asset then it should be described in the annual re'ort together &ith an indication o! the use to &hich it &ill be 'ut. $he descri'tion should ta6e into account any re9uests !or anonymity by the donor and any need !or con!identiality.
2(
8! an asset cannot be valued at the date o! recei't but is later sold% the sale 'roceeds should be included as income at the date o! sale. 8! the amount arising !rom the sale o! an asset in a 'eriod later than the 'eriod o! recei't o! the asset is signi!icant% this !act should be re'orted and the amount disclosed. 8n the balance sheet% material donated assets% unless they are included in the statutory inventory% &ill be recorded at the value recorded in the S4FA and identi!ied to the a''ro'riate !und. 6.1.# Co#t# o$ .eneratin. $!nd# 27'enditure incurred in order to earn income should not be netted o!! that income but should be sho&n under Gcosts o! generating !undsG. 27am'les are the costs o! running a cathedral sho' and the costs o! maintaining investment 'ro'erty and o! collecting investment income. 8ncome !rom a''eals managed by the cathedral or its agents should be brought into account gross% and costs should be accounted !or as costs o! generating !unds. 6.1.4 Re#o!rce# eDpended 7!i'din. repair#; re#toration and +aintenance
4nly e7'enditure actually incurred on re'airs% restoration and maintenance should be charged to the S4FA. Any amount retained !or !uture e7'enditure should be carried !or&ard as 'art o! the unrestricted or designated !unds as a''ro'riate. 27'enditure on re'airs% restoration and maintenance% including direct labour% should be allocated to the a''ro'riate heading in the S4FA: Costs o! generating !unds o Sho's% re!ectory and other activities o 8nvestment 'ro'erty +inistry =clergy% organist% choir members and vergers housing> Cathedral and 'recincts u'6ee' 2ducation =library and school costs>.
S!pport co#t#
Su''ort costs are those costs &hich in themselves do not contribute to mission or generate !unds but are necessary !or those activities to ta6e 'lace. $hey may include o!!ice sta!! costs% o!!ice accommodation% o!!ice e9ui'ment% in!ormation technology% training and general o!!ice costs. $hese costs should all be allocated to those activities &hich they directly su''ort under the three main headings o! costs o! generating !unds% resources e7'ended on mission and governance costsE and then to the ca'tions &ithin each o! those three main headings. $he costs o! service de'artments should be allocated to those de'artments they su''ort i! they cannot be directly allocated to one o! the e7'enditure headings in the S4FA. For e7am'le% in!ormation technology and tele'hone costs could be allocated by the number o! com'uters or tele'hones in each de'artmentE o!!ice u'6ee'% 'hotoco'ying and
2*
stationery could be allocated according to the number o! !ull1time1e9uivalent sta!!. $raining &ould be allocated to &here it has been given. A statement o! the total su''ort costs a''ortioned must be 'rovided in the notes. For e7am'le: Direct costs Costs o! generating !unds +inistry Cathedral and 'recincts u'6ee' 2ducation and outreach Community% 'arish and congregation Cathedral building additions Statutory inventory additions 4ther e7'enditure on mission .overnance costs $4$A3 Su''ort costs can be !urther allocated to subheadings in the notes% i! desired. Alternatively% a total !or su''ort costs should be sho&n under each ma5or heading in the notes. A !urther note should analyse the total su''ort costs bet&een the various de'artments involved. @AT Su''ort costs $otal
8n accordance &ith SSA - any irrecoverable MA$ should be included in the e7'enditure &hich gives rise to it. $he total amount should be given in a note. Depreciation
For each class o! de'reciable !i7ed asset% the number o! years or the 'ercentage annual rate used to &rite o!! the asset together &ith the method o! de'reciation =e.g. straight line% reducing balance> should be disclosed.
#0
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For+at o$ Con#o'idated State+ent o$ Financia' Acti*itie# $he S4FA should be analysed in columns bet&een: ,nrestricted !unds <estricted !unds 2ndo&ment !unds $otal.
A''endi7 1 e7'lains ho& to account !or !unds. 3i6e the Charities S4< % the regulations do not re9uire designated !unds to be se'arated !rom unrestricted !unds on the !ace o! the S4FA. Do&ever% a number o! cathedrals designate an a''reciable 'ro'ortion o! their !ree reserves. $he regulations recognise that these cathedrals may &ish to disclose this by &ay o! an additional column in the S4FA bet&een unrestricted !unds and restricted !unds.
#1
0orEed eDa+p'e o$ SOFA

Unre#tricted Re#tricted F!nd# F!nd# Inco+in. re#o!rce# Moluntary income .rants receivable Charges and !ees arising in the course o! mission 8ncome !rom activities generating !unds 8ncome !rom investments 4ther incoming resources Tota' inco+in. re#o!rce# Co#t# o$ .eneratin. $!nd# Net inco+in. re#o!rce# a*ai'ab'e $or +i##ion Re#o!rce# eDpended on +i##ion +inistry Cathedral and 'recincts u'6ee' 2ducation and outreach Community% 'arish and congregation Cathedral building additions Statutory inventory additions 4ther e7'enditure on mission Tota' re#o!rce# eDpended on +i##ion Go*ernance co#t# Total expenditure on generating funds, mission and governance Net inco+in. 5o!t.oin.6 re#o!rce# Other reco.ni#ed .ain# 5'o##e#6 8nvestment 'ro'erty 8nvestments 0on investment 'ro'erty Actuarial gains =losses> on de!ined bene!it 'ension schemes Gro## tran#$er# bet"een $!nd# Net +o*e+ent in $!nd# $otal !unds brought !or&ard reviously ca'italised assets Tota' $!nd# carried $or"ard 10 6 " ( * # 4#0 606 111 1 20 (;(&62,440 5%4)6 1 =4"> 2 1 =4-> =-#> 514&6 1%46( 1 (;((( 1*# #2 4( 1 1 21 1 %)4 1 300 18 1 =6#> 1 1 =6#> 1# 5(%6 1%(0# =4-> (;&9* 1 1 1 100 1 1 (,) 1 109 (( =-00> =1> ( 1 =4*#> 40 599%6 1#%211 (%;&&1 6#2 6#( 16# 6 100 21 20 (;48, 62,849 5%(,6 =-00> =111> 10 1 =601> 1 58((6 16%4(6 =4-> (4;-1, -"4 1%"2( 161 1 1 1 40 2%-0# 60 3,713 =1%264> #-0 *6 11 1 4-" 1 =(0"> 1"%2*# 1 16%4(6 0otes 1 B,,, (6 1 1 1%1"6 *1* 1 %;(8( 2 1%1** )8% B,,, 44 *6 -6 1 1#6 6 118 111 Endo"+ent F!nd# B,,, 20 100 1 1 1 1 (%, 0 (%, Tota' F!nd# %,,B,,, 1-0 1*6 -6 1%1"6 1%0-6 %;-1) 1%204 (;914 $otal Funds 200N000 1-2 (6 62 ((6 1%22# 40 2%44* 1%1-0 1%2**
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-:1 6.#.1
SOFAF EDp'anation o$ "hat to inc'!de !nder indi*id!a' ite+# $he S4FA must be a com'rehensive account o! all resources receivable and 'ayable by the cathedral during the year. 0o amount may be credited or debited directly to any !und &ithout 'assing through the S4FA. 4nly ca'ital e7'enditure =i.e. e7'enditure to create a !i7ed asset recognised in the balance sheet> should not a''ear in the S4FA. $he items in this section are listed in the order in &hich they a''ear in the S4FA. Further analysis &ithin headings may be 'rovided i! desired and headings not re9uired should be omitted. 8ndividual items may either be sho&n on the !ace o! the S4FA or in the notes to the accounts &ith clearly identi!iable totals carried to the S4FA. $he notes should normally include all the ca'tions listed in this section 6.#.
6.#.2
6.#.# Inco+in. re#o!rce# @o'!ntary inco+e Con.re.ationa' co''ection# and .i*in. 8ncome received !rom congregational collections and donations =e7cluding those !or s'eci!ic a''eals% !rom visitors and trusts% and !rom legacies% all o! &hich% i! material% should be sho&n under s'eci!ic headings>. Donation# Donations !rom visitors and individuals and organisations% &hich !all outside the conce't o! congregational giving. Inco+e $ro+ appea'# and $!ndrai#in. TaD reco*erab'e !nder Gi$t Aid on *o'!ntary donation#
Inco+e $ro+ Friend# and 'oca' tr!#t# All amounts given by the cathedral/s Friends% including the amounts s'ent by Friends on the cathedral/s behal!. $his heading% e7'anded i! a''ro'riate% &ill also include grants !rom trusts !ormed to raise !unds !or the cathedral. Le.acie# ,nder the !undamental accounting conce't o! accruals all income should be accounted !or &hen it becomes due. 3egacies are% in 'rinci'le% no di!!erent !rom any other item o! income and should be accrued as a debtor &here the criteria a''licable to the accrual o! any item o! income can be !ully met. $hese criteria are: o 2ntitlement: the cathedral is certain o! its entitlement to the item o! income and any 're1conditions have been com'lied &ith. o Certainty: it is reasonably certain that the item &ill be received &ithin a measurable time s'an.
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o +easurement: the amount to &hich the cathedral is entitled and &hich &ill be received can be reliably measured. 8t is unli6ely that a residual be9uest &ould meet the measurement criterion. $he amounts receivable should be allocated to the relevant !und columns in the S4FA according to any restrictions 'laced on their use. Grant# recei*ab'e Ch!rch Co++i##ioner#3 .rant# Sti'ends and other associated costs 'aid by the Church Commissioners !or the Dean and Commissioners/ residentiary canons 'lus any income received under S2# o! the Cathedrals +easure 1*** or any other sort o! grant !rom the Church Commissioners. Sti'ends and Section 2# grants should be included as restricted !unds. $he associated e7'enditure should be allocated 'ro rata bet&een all relevant sta!! headings. Dioce#an .rant# Any sort o! grant !rom the diocese% including any sti'ends% salaries and other associated costs 'aid by the diocese !or clergy or lay sta!! engaged on cathedral duties% 'ro rata by the time involved. $he associated e7'enditure should be allocated to the relevant headings. En.'i#h Herita.e
Other re*en!e and capita' .rant# .rants !rom trusts and other organisations% &hich derive !rom sources not s'eci!ically raising !unds !or the cathedral. Char.e# and $ee# ari#in. in the co!r#e o$ +i##ion Faci'ity and other $ee#
Gro## inco+e o$ the choir #choo' $his heading &ill only be used &here the school/s results are consolidated. $he income re'orted in the cathedral/s consolidated accounts &ill not include !ees or any other income received by the school !rom the cathedral as these &ill be eliminated on consolidation against the cost o! !ees 'aid in the cathedral/s boo6s. Do&ever% this in!ormation should be 'rovided in a note to the accounts% see 'aragra'h *.12. Inco+e $ro+ acti*itie# .eneratin. $!nd# Char.e# to *i#itor# All income received !rom tourists and visitors to the cathedral as !ormal entrance charges etc. Donations !rom visitors have their o&n heading under Gvoluntary incomeG.
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Gi$t Aid on entrance char.e# Any .i!t Aid recoverable should be sho&n se'arately. Gro## inco+e o$ #hop; re$ectory and other tradin. acti*itie# .ross earnings !rom the 'rovision o! sho' and other retail outlets% re!ectory and other catering !acilities and any income received !rom other trading activities% including &or6 'er!ormed by the cathedral/s sta!!% e.g. masons% stained glass artists% members o! the &or6s sta!! =such as gardeners>% etc% !or other bodies. Cathedrals may &ish to e7'and this and add !urther sub1 headings. Inco+e $ro+ in*e#t+ent# Inco+e $ro+ in*e#t+ent property Service charge income should be included &here it belongs to the landlord% ie &here the landlord is res'onsible !or maintenance etc and recovers his e7'enditure !rom the tenants. ;here there is an inde'endent service charge account% service charge income does not belong to the landlordE the landlord may have to contribute to the service charge account in res'ect o! common 'arts and vacant 'ro'erty. Inco+e $ro+ other in*e#t+ent# Intere#t recei*ab'e on #hortAter+ depo#it#
Other inco+in. re#o!rce# In#!rance reco*erie#
Gain# on di#po#a'# o$ operatin. a##et# $hese are !i7ed assets other than 'ro'erty and investments. 6.#.4 Other ite+#
Co#t# o$ .eneratin. $!nd# Co#t# o$ $aci'itie# $or *i#itor# Costs o! the &elcome ministry% including hos'itality and sta!! and administration s'eci!ically associated &ith visitors. Co#t# o$ #er*ice# direct'y reco*erab'e
Gro## co#t# o$ #hop; re$ectory and other tradin. acti*itie# $hese costs &ould be net o! any items eliminated on consolidation. Genera' +arEetin. co#t#
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27am'les are advertising cathedral !acilities and events in lea!lets and magaCines 'roduced by tourist boards and others as &ell as the cathedral/s o&n 'ublicity. Co#t# o$ appea'# and $!ndrai#in.
In*e#t+ent property co#t# <ental collection costs% rents 'ayable% insurance% re'airs and maintenance% landlord/s service charge costs and other 'ro'erty e7'enses relating to investment 'ro'erties. Similar items o! e7'ense relating to 'ro'erty !or cathedral use or trading should be included under the relevant e7'ense heading. 6.#.In*e#t+ent +ana.e+ent co#t# S!pport co#t# =i! not allocated across above sub1headings>
EDpendit!re on +i##ion Mini#try C'er.y #tipend# and "orEin. eDpen#e# $his !igure should include clergy sti'ends% em'loyer/s national insurance and 'ension contributions% &or6ing e7'enses and associated costs &hether 'aid by the cathedral% the Church Commissioners% the diocese or others. C'er.y ho!#in. co#t#
C'er.y #!pport co#t# Costs associated &ith the cathedral clergy such as training% identi!iable 'ayroll costs and other e7'enses. 8t should also include the costs o! direct su''ort sta!!% e.g. the Dean/s secretary. Ser*ice# and +!#ic Costs o! holding services% e.g. sanctuary su''lies% 'rinting service cards etc.. Costs o! the music sta!! and choir% !ees 'ayable to any choir school not included in the consolidated accounts% visiting choirs% choir tours% vestments% sheet music% commissions% organ re'airs and tuning etc.. All costs o! the vergers% including salaries% em'loyerAs national insurance and 'ension contributions% bene!its including housing costs and other e7'enses should% i! a''ro'riate% ideally be divided bet&een this heading and interior u'6ee'. S!pport co#t# =i! not allocated across above sub1headings>
Cathedra' and precinct# !pEeep Ma or repair# and re#toration
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+a5or re'airs and restoration o! the !abric are &or6s o!ten involving elements o! conservation or re'lacement and are distinguishable !rom routine maintenance by the siCe o! the &or6 involved% the irregular nature o! their incidence% and the !act that they &ill not recur in the !oreseeable !uture or !or a very long 'eriod o! time. $hese costs include all associated e7'enditure including 'ro!essional !ees. Maintenance and interior !pEeep Costs o! routine re'airs to and maintenance o! the cathedral !abric including 'ro!essional !ees% 'remises management costs% materials etc. Costs o! u'6ee' o! the interior o! the cathedral include cleaning% 'urchases o! e9ui'ment% !ittings and !urniture not ca'italised as !i7ed assets and maintaining the heating. eriodic modest re!urbishment &ill come under this heading. Cathedra' in#!rance
Precinct#; #ec!rity and .arden# !pEeep $he costs o! gardeners% 'recinct cleaners% security o!!icers and their e9ui'ment =e7cluding those already included under other headings>: this should also include other associated costs such as lighting &al6&ays% signs% notices% trees% etc. S!pport co#t# Sta!! and other costs associated &ith cathedral u'6ee'% i! not directly attributable to any o! the above. Ed!cation and o!treach Choir #choo' co#t# Sums 'aid to the Cha'ter &hich are eliminated on consolidation &ill not be included here but should be sho&n in a note% see 'aragra'h *.12. Grant# and #cho'ar#hip# .rants to ordinands are the most obvious items to include. 2ducation costs o! choristers should be included &ith the cost o! services and music under ministry. 0o analysis o! grants to individuals is re9uired. Ed!cationa' acti*itie# $he educational as'ect o! visitors/ and education centres and the costs o! courses and seminars% in 'articular those !or schools. Archi*e# and 'ibrary Charitab'e and other .i*in. S!pport co#t# =i! not allocated across above sub1headings>
Co++!nity; pari#h and con.re.ation
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27'enditure related to the creation and maintenance o! the cathedral community roll and meetings o! the community and any cathedral community committees. For those cathedrals that have such costs: 'arish share% youth &or6% adult education !or congregation% 'arish or congregational grou's and activities% committees etc. S!pport co#t# =i! sho&n se'arately>
Cathedra' b!i'din. addition# S!pport co#t# =i! sho&n se'arately>
Stat!tory in*entory addition# S!pport co#t# =i! sho&n se'arately>
Other eDpendit!re on +i##ion Intere#t and #i+i'ar char.e# payab'e
All interest% commission and !ees 'ayable on loans% ban6 overdra!ts and other borro&ings and ban6 charges. Lo##e# on di#po#a' o$ operatin. a##et# $hese are !i7ed assets other than 'ro'erty and investments. Other ite+# S!pport co#t# =i! not allocated across above sub1headings>
6.#.6 Go*ernance co#t# Costs associated &ith the governance in!rastructure &hich allo&s the cathedral to o'erate% rather than mission or !undraising. $hese &ill include such e7'enditure as internal and e7ternal audit% legal advice and the cost o! constitutional and statutory re9uirements% e.g. Cha'ter% Cathedral Council% College o! Canons% !inance committee and FAC meetings% the 're'aration o! the annual accounts and trustee indemnity insurance 'remiums. Fees 'aid !or the valuation o! 'ro'erty should be charged under the !und to &hich the 'ro'erty belongs. 8! this is an endo&ment !und &hich has no realisable assets% a trans!er should be made !rom unrestricted !unds to cover these !ees. S!pport co#t# =i! sho&n se'arately>
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6.#."
Other reco.ni#ed .ain# and 'o##e# All realised and unrealised gains and losses on 'ro'erties% investments and actuarial ad5ustments on de!ined bene!it 'ension schemes. $hese categories should be se'arately disclosed either on the !ace o! the S4FA or in the notes.
6.#.(
Gro## tran#$er# bet"een $!nd# $he reasons !or any trans!ers bet&een !unds should be e7'lained in the notes to the accounts.
6.#.*
Pre*io!#'y capita'i#ed a##et# 8n the !irst year o! ado'tion o! these regulations% cathedrals may have to &rite1 o!! 'reviously ca'italised additions to their cathedral buildings or statutory inventory =see 'aragra'h ".2.6>.
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&
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7ALANCE SHEET
Genera' $he balance sheet should sho& a !igure !or net assets. $his should e9ual the total o! all the !unds included in the consolidation. $hese should be subdivided bet&een unrestricted% designated =i! disclosed se'arately: see 'aragra'h 6.2>% restricted and endo&ment. 8n order to be able to attribute income% and gains or losses to the relevant !und% cathedrals must identi!y individual 'ro'erties and investments &ith s'eci!ic !unds.
&:%
The cathedra'; it# anci''ary b!i'din.# and the in*entory
".2.1 $he S4< 'rovides that heritage assets may be e7cluded !rom the balance sheet &here: reliable cost in!ormation is not available and conventional valuation a''roaches lac6 su!!icient reliabilityE or signi!icant costs are involved in 'roviding a valuation and are onerous com'ared &ith the bene!it derived by users o! the accounts.
:oth these circumstances are li6ely to e7ist in relation to the cathedral and its ancillary buildings% such as the cha'ter house% cloisters and libraries. Accordingly% no value should be attributed in the balance sheet to the cathedral and its ancillary buildings. Do&ever% residential 'ro'erties% investment 'ro'erties and 'ro'erties used solely !or trading should al&ays be valued. ".2.2 Similarly% no value should be attributed to items included in the inventory 're'ared under S1#=1> o! the Care o! Cathedrals +easure 1**0 as being o! architectural% archaeological% artistic or historic interest. ".2.# $his treatment o! the cathedral% its ancillary buildings and the inventory should be disclosed and e7'lained in the accounting 'olicies note. ".2.4 8n!ormation on the cathedral buildings and items in the inventory should be given in the notes to the accounts and should be su!!icient to enable the reader to a''reciate the age and scale o! these assets. $he in!ormation should include details o! the assets/ insured value and &hat use is made o! them% unless the 'ublication o! this in!ormation &ould 're5udice the cathedral% e.g. by materially increasing the ris6 o! the!t or vandalism o! the assets in 9uestion. ".2.- Any material dis'osals or additions o! items !rom or to the inventory should be detailed together &ith their !inancial im'lications in the annual re'ort and in the note on net transactions a!!ecting the inventory. 8tems donated to the inventory should be valued according to the rules !or gi!ts in 6ind =see 'aragra'h 6.1.2>. ".2.6 Some cathedrals may have ca'italised additions to their cathedral building or their statutory inventory in accounts 're'ared in accordance &ith the +arch 2002 Accounting .uidelines. 8n the !irst year o! ado'tion o! these regulations% these
40
heritage assets% &hich are e7cluded !rom the balance sheet ='aragra'hs ".2.1 and ".2.2>% should be &ritten1o!! in the S4FA% a!ter total !unds brought !or&ard. &:1 ".#.1 Property 4n the !ace o! the balance sheet 'ro'erties should be classi!ied under the !ollo&ing headings: ".#.2 8nvestment 'ro'erties 4ther 'ro'erties
4ther 'ro'erties should be !urther divided bet&een 'ro'erties used: For cathedral use =e.g. !or occu'ation by the cathedral clergy or other members o! the cathedral sta!!% or !or &orshi'% educational or administrative 'ur'oses> For trading activities% including those o! connected entities% =e.g. cathedral sho's% re!ectories> For school use =see 'aragra'h ".#.">.
8t should be noted that the critical determinant is the use to &hich the 'ro'erty is 'ut% not the !und by &hich it is !inanced. For e7am'le% although endo&ment assets are normally held to generate income% endo&ment 'ro'erty used to house cathedral sta!! is not investment 'ro'erty. ".#.# $he amounts under each o! the 'ro'erty headings in 'aragra'h ".#.1 above should be sub1classi!ied in the notes to the accounts bet&een ".#.4 !reehold% long leasehold =&here there is more than -0 years o! the lease le!t to run at the balance sheet date> and short leasehold.
$he basis o! valuation used in the accounts should be as !ollo&s: 8nvestment 'ro'erties should be included in the balance sheet at mar6et value and not de'reciated in accordance &ith SSA 1* ro'erties used !or cathedral 'ur'oses ='aragra'h ".#.2 above> should be carried at e7isting use value or% i! they are s'ecialised 'ro'erties !or &hich there is no normal mar6et% at de'reciated re'lacement cost in accordance &ith F<S 18! 'ro'erties are occu'ied by individuals &ho have the right o! occu'ation then this should be ta6en into account &hen valuing these 'ro'erties.
".#.- 8nde'endent !ormal 'ro!essional valuations are not mandatory !or charities: but in order to 'rovide an acce'table indication o! the ca'ital em'loyed in the various activities o! the Cha'ter% it &ould be 're!erable to have !ormal valuations at mar6et value carried out by inde'endent 'ro!essional advisors or a''ro'riately 9uali!ied
41
members o! sta!! or advisory committees. Such a 'erson &ould base their valuation on !actors such as 6no&ledge o! local rents and 'ro'erty values. $he valuation must be carried out at least every !ive years: any material movements bet&een individual valuations should be included in the accounts. ".#.6 $he notes to the accounts should disclose &ho has made the valuation giving their name% 9uali!ication and 'osition =e.g. member o! the Council or Cha'ter% em'loyee% e7ternal valuer> and ho& the valuation has been done. ".#." Some cathedrals may o&n or lease 'ro'erty used by a choir or other school. 8! the school does not meet the criteria !or consolidation or e9uity accounting and 'ays rent to the cathedral% there is a 'resum'tion that the buildings are investment 'ro'erties and should be included under that heading in the balance sheet at mar6et value in accordance &ith SSA 1*. 8n other cases% the buildings should be classi!ied in the note on non1investment 'ro'erty as a third category as in 'aragra'h ".#.2 and% in accordance &ith F<S 1-% carried at e7isting use value or% i! they are s'ecialised 'ro'erties% at de'reciated re'lacement cost. A 9uanti!ied descri'tion o! the !inancial arrangements bet&een the cathedral and the school and ho& these have been re!lected in the accounts should be included in the notes to the accounts% see 'aragra'h *.12. &:9 Depreciation o$ propertie# !#ed $or cathedra' p!rpo#e#
".4.1 De'reciation should be 'rovided on the balance sheet values o! all 'ro'erties e7ce't investment 'ro'erties. ;hether or not school buildings should be de'reciated &ill de'end on &hether they ran6 as investment 'ro'erties% see 'aragra'h ".#.". ".4.2 De'reciation should be calculated by re!erence to une7'ired lives and estimated residual values based on current 'rices. $he economic li!e should be revie&ed each year and% i! it is material% the residual value should also be revie&ed each year. $he only e7ce'tion to charging de'reciation is !or immateriality. $his im'lies a long une7'ired li!e andIor a high residual value =based on current 'rices>. $o 5usti!y a high residual value the cathedral might be able to demonstrate that it has one or more o! the !ollo&ing: ".4.4 A 'olicy and 'ractice o! regular maintenance A 'ro'erty unli6ely to su!!er obsolescence% e.g. due to changes in !ashion A 'olicy and 'ractice o! dis'osing o! similar 'ro'erties &ell be!ore the end o! their lives A record o! the dis'osal 'roceeds o! similar 'ro'erties matching balance sheet values.
".4.#
An annual im'airment revie&% as described in F<S 11% should be carried out i! de'reciation is not charged on grounds o! immaterialityE or !or each 'ro'erty &hose une7'ired li!e is estimated at more than -0 years.
".4.-
;here di!!erent 'arts o! a 'ro'erty have substantially di!!erent use!ul lives the di!!erent 'arts should be valued and de'reciated se'arately.
42
&:4 ".-.1
In*e#t+ent# 29uity shares and bonds should be carried at mar6et value. 8! investments are material then% in order to give an indication o! the degree and nature o! ris6 to &hich they are e7'osed% they should be classi!ied in the notes bet&een ty'e =e.g. e9uity and !i7ed interest> and &hether listed on a recognised stoc6 e7change in the ,)% overseas% or unlisted. ;here values o! material investments are determined other than by re!erence to readily available mar6et 'rices% the method o! valuation should be disclosed. Shares in unlisted com'anies should be valued by re!erence to latest dealing 'rices% earnings% dividend record and underlying net assets as a''ro'riate. Any investments in non1consolidated connected entities should be valued on the e9uity method =i.e. at the cathedral/s share o! the underlying net assets> and the cathedralAs share o! the 'ro!its o! such entities should be credited to the S4FA under a se'arate heading. Details o! such investments should be 'rovided in the notes. P'ant; +achinery; *ehic'e#; o$$ice eC!ip+ent; co+p!ter#; $!rnit!re and $ittin.# ,nless &ritten o!! on ac9uisition% the cost o! 'lant% machinery% vehicles% o!!ice e9ui'ment% com'uters and !urniture and !ittings should be carried at cost less de'reciation. $he threshold belo& &hich the cathedral &rites o!! items on ac9uisition should be stated in the accounting 'olicies note.
".-.2
&:-
&:&
Mo*e+ent# on $iDed a##et# A reconciliation should be 'rovided in the notes bet&een the !igures !or each o! the ma5or subdivisions o! !i7ed assets at the end o! the 'revious and current years% sho&ing 'urchases% sales% recognised changes in value and amounts &ritten o!!.
&:8
StocE Stoc6 should be carried at the lo&er o! cost and net realisable value. A descri'tion o! items included in stoc6 should be 'rovided in the notes to the accounts. 8t is unli6ely that stoc6s o! consumables =e.g. candles% communion &a!ers and &ine> &ould be su!!iciently material to 5usti!y inclusion in the balance sheet.
&:)
7orro"in.# Disclosures on borro&ings should !ollo& the re9uirements o! F<S 4E a descri'tion should be 'rovided o! each loan giving its rate o! interest% re'ayment method and any security 'rovided by the cathedral% by any other entity included in the consolidation% or by a third 'arty. An analysis o! total debt should sho& amounts !alling due: in one year or less =under current liabilities> bet&een one and t&o years bet&een t&o and !ive years and in !ive years or more.
4#
&:(,
Debtor# and creditor# Debtors and creditors should be analysed in the notes by age =&ithin one year and over one year> and by ty'e: trade connected entities other accruals.
44
&:((
0orEed eDa+p'e o$ Con#o'idated 7a'ance Sheet

Unre#tricted Re#tricted F!nd# F!nd# 0otes B,,, 1 --6 --6 4#0 -6 4(6 (;,9% 22 #2" 10 46 40=66> =2"0> =##6> B,,, 1 1%"46 1%"46 1 1 0 (;&91 1 1 1 1 1 1 1 A (;&91 (;&9Endo"+ent F!nd# B,,, 11%000 #4 11%0#4 1%"40 1 1%"40 (%;&&9 1 1 1 1 1 1 1 1 A (%;&&9 =1> (%;&&1 Tota' F!nd# %,,B,,, 11%000 2%##6 1#%##6 2%1"0 -6 2%226 (4;4-% 22 #2" 10 46 40=66> =2"0> =##6> -) (4;-1( =1> (4;-1, $otal Funds 200N000 11%-00 2%#"( 1#%("( 2%1-6 24 2%1(0 16%0-( 26 2*220* --0 =1"0> =1"0> #(16%44# =2> 16%441
FiDed a##et# In*e#t+ent a##et# ro'erty 8nvestments Non in*e#t+ent a##et# ro'erty 29ui'ment and 'lant Tota' $iDed a##et# C!rrent a##et# Stoc6s Debtors Short term de'osits Cash at ban6 and in hand Liabi'itie# d!e "ithin one year 3oans and ban6 overdra!t Creditors
6 " 11
12
1#
Net c!rrent a##et# Tota' a##et# 'e## c!rrent 'iabi'itie# Liabi'itie# d!e a$ter one year 3oans Net a##et# F!nd# .eneral !und Designated !unds Fabric !und +usic !und 4ther !unds
-) (;((( 1 (;(((
6(1 4#0 1 1 1 (;(((
1 1 6-4 -04 -(( (;&9-
10%621 2%14( 1 1 (%;&&1
11%#06 4#0 2%(02 -04 -(( (4;-1,
12%-2# 1 2%(1( -0( -*2 16%441
4-
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0orEed eDa+p'e o$ #e'ected Note# to the Acco!nt#

Unre#tricted F!nd# B,,, Re#tricted F!nd# B,,, 1 1 1 1 1 1 10 4 2 =21> 1 Endo"+ent F!nd# B,,, 1 1 1 1 1 1 $otal Funds 2006 N000 10 4 2 =21> 1
9 Net in*entory tran#action# .rants !or ac9uisitions Cash donations !or ac9uisitions Donations o! assets roceeds o! dis'osals Ac9uisitions 0et transactions 4 In*e#t+ent property At valuation 1 Oanuary 0et =decrease> increase on revaluation At valuation #1 December All investment 'ro'erties are !reehold. - In*e#t+ent# 8nvestments at mar6et value 1 Oanuary Additions roceeds !rom dis'osals 0et =decrease> increase on dis'osals and revaluation 8nvestments at mar6et value #1 December Short term de'osits Cash & Non in*e#t+ent property At valuation 1 Oanuary Additions De'reciation 0et increase on revaluation At valuation #1 December 4#0 1 =2> 2 4#0 1 1 1 1 1 1%"26 1=*> ( 1%"40 2%1-6 1=11> 10 2%1"0 "6( 1 =16-> =4"> --6 1 1 --6 1%-6" 1 0 =6#> 1%-04 2#" 1%"46 20 =1-> =1> * 1 2#4 2%#40 20 =1(0> =111> 2%06* 2##2 2%##6 1 1 1 1 1 1 11%-00 =-00> 11%000 11%-00 =-00> 11%000
46
0on investment 'ro'erties are held and used as !ollo&s:
3eased &ith more than -0 Freehold years to run N000 N000 -40 1%0*##0 1%42-40 -40 1%110 ##0 1%440 -40
3eased &ith less than -0 years to run N000 *1 100 1*1 *0 100 1*0 Endo"+ent F!nd# B,,,
$otal N000 6#1 1%0*4#0 2%1-6 6#0 1%110 4#0 2%1"0 $otal Funds 2006 N000
At 1 Oanuary !or cathedral clergy and sta!! housing !or the education centre !or cathedral trading activities At #1 December !or cathedral clergy and sta!! housing !or the education centre !or cathedral trading activities
Unre#tricted Re#tricted F!nd# F!nd# B,,, 8 Act!aria' .ain# 5'o##e#6 on de$ined bene$it pen#ion #che+e# 20 1 20 1 1 1 B,,,
At valuation 1 Oanuary Actuarial gains =losses> At valuation #1 December (( EC!ip+ent and p'ant Cost De'reciation 0et boo6 value at 1 Oanuary Additions roceeds !rom dis'osals De'reciation !or year 3osses on dis'osals 0et boo6 value at #1 December Cost De'reciation 0et boo6 value at #1 December (% Debtor# d!e "ithin one year $rade debtors Due !rom connected entities 4ther debtors re'ayments and accrued income
1 1 1
20 1 20
-4 =#0> 24 40 1 =(> 0 -6 *4 =#(> -6
1 1 1 1 1 1 1 1 1 1 1
1 1 1 1 1 1 1 1 1 1 1
-4 =#0> 24 40 0 =(> 0 -6 *4 =#(> -6
2(0 12" #2"
1 1 1 1 1
1 1 1 1 1
2(0 12" #2"
4"
Unre#tricted Re#tricted F!nd# F!nd# B,,, (1 Creditor# d!e "ithin one year $rade creditors Due to connected entities 4ther creditors Accruals and de!erred income =120> =#-> =1-> =100> =2"0> 1 1 1 1 1 B,,,
Endo"+ent F!nd# B,,,
$otal Funds 2006 N000
1 1 1 1 1
=120> =#-> =1-> =100> =2"0>
4(
8
8:(
CASH FLO0 STATEMENT

Genera'
(.1.1 8! a cash !lo& statement is 'resented it should !ollo& the re9uirements o! F<S1% Cash Flo& Statements% in so !ar as they are a''licable. $he treatment o! additions to endo&ment ca'ital% as set out in the !ollo&ing 'aragra'h% should be noted. (.1.2 +ovements in endo&ments should not be included in cash !lo&s !rom ?o'erating activities@% but should be treated as increases or decreases in the !inancing section. Cash donations and other additions to endo&ment ca'ital should a''ear as such in the ?!inancingG section. 4n the rare occasion &hen 'ayments are made out o! 'ermanent endo&ment this should be sho&n as a decrease in the ?!inancing@ section. 8:% 0orEed eDa+p'e o$ Con#o'idated Ca#h F'o" State+ent
0otes Net ca#h o!t$'o" $ro+ operatin. acti*itie# Ret!rn# on in*e#t+ent# <ents received net o! costs 8nterest and dividends received net o! costs Capita' eDpendit!re and $inancia' in*e#t+ent urchases o! investments Sales o! investments Additions to non investment 'ro'erty urchases o! e9ui'ment and 'lant Sales o! e9ui'ment and 'lant Ca#h o!t$'o" be$ore +ana.e+ent o$ 'iC!id re#o!rce# and $inancin. =#4> Mana.e+ent o$ 'iC!id re#o!rce# 0et =increase> decrease in short term de'osits Financin. 0e& endo&ments received Decrease in loans 8ncrease in overdra!t 1=200> =*4"> 1%04* 14 64# 1-0 "*# =20> 1(0 =1-> =40> 1 101 1-6 1 =4> 2 1-4 B,,, %,,B,,, =*#2> "66 1*1 *-" N000 200N000 =2%0-(>
11-
20 =1> 66 (-
1 =1> 1 =1> 101
5Decrea#e6 increa#e in ca#h
1-
=14*>
4*
8:1
0orEed eDa+p'e o$ Ca#h F'o" Note#
(9 Reconci'iation o$ net o!t.oin. re#o!rce# be$ore a##et re*a'!ation# to net ca#h o!t$'o" $ro+ operatin. acti*itie# %,,B,,, 0et outgoing resources be!ore revaluations and dis'osals o! 'ro'erty and investments 3ess income added to endo&ment ca'ital 3ess income !rom 'ro'erty and investments Add 'ro'erty management costs% rental collection !ees and investment management costs Add de'reciation Add losses on dis'osals o! e9ui'ment and 'lant Decrease in stoc6s 8ncrease =decrease> in debtors 8ncrease in creditors Net ca#h o!t$'o" $ro+ operatin. acti*itie# (4 Reconci'iation o$ net ca#h $'o" to +o*e+ent in net $!nd# %,,B,,, =Decrease> increase in cash in the year Cash out!lo& !rom re'ayment o! loan Cash in!lo& !rom increase in overdra!t Cash out!lo& =in!lo&> !rom increase =decrease> in short term de'osits held as investment assets Cash in!lo& !rom decrease in short term de'osits held as current assets Decrease in net !unds in the year 0et !unds at 1 Oanuary 0et !unds at #1 December (- Ana'y#i# o$ chan.e# in net $!nd# At 1 Oanuary Cash at ban6 and in hand held as current assets Cash held as investment assets :an6 overdra!t 3oans due !or re'ayment a!ter one year Short term de'osits held as investment assets Short term de'osits held as current assets 20* 1( 1 =2> 20 22"0 Cash !lo& =16#> 14 =66> 1 21=1-> =14> At #1 December 46 #2 =66> =1> 2#10 2-6 =14*> 1 =66> 21=1-> =14> 2"0 2-6 200N000 101 1 1 =-00> =-4*> =*4"> 1%21" 2"0 =210> =20> =1%0--> 262 1* 1 4 =#2> 100 =*#2> 200N000 =1%264> 1 =1%22#> 266 1* 40 0 (# 21 =2%0-(>
-0
)
):(
NOTE DISCLOSURES
F!nd# $he notes to the accounts should 'rovide in!ormation on the structure o! the cathedral/s !unds. 8n 'articular: the material individual !und balances and the reasons !or them% di!!erentiating bet&een unrestricted !unds% designated !unds% restricted !unds and 'ermanent endo&ment disclosure should be made o! the 'ur'ose o! each o! these !unds and the restrictions or conditions im'osed any !unds in de!icit should al&ays be se'arately disclosed. An e7'lanation should be given in the annual re'ort =see 'aragra'h 4.6.1>. Designated !unds can never be in de!icit e7'lanations should be 'rovided !or any unusual movements in the !unds. 8n disclosing details o! movements on !unds% material trans!ers bet&een di!!erent !unds and allocations to designated !unds should be se'arately disclosed% &ithout netting o!!% and should be accom'anied by an e7'lanation o! the nature o! the trans!ers or allocations and the reasons !or them.
):%
Sta$$ n!+ber# $he notes to the accounts should contain details o! the average number o! 'aid sta!! &or6ing !or the cathedral during the year. $he numbers should be divided bet&een a''ro'riate categories. For this 'ur'ose ?'aid sta!!@ should include all those% including clergy 'aid by the cathedral% the Church Commissioners or other 'arties% &or6ing !ull or 'art time !or an entity included in the cathedralAs consolidated accounts. $he total number o! sta!! and also the !ull time e9uivalent number o! sta!! should be given. 8ndividuals &ho have only their e7'enses reimbursed should not be regarded as 'aid em'loyees.
):1
Sta$$ co#t# $he total cost o! all 'aid sta!! o! the cathedral should be disclosed in the notes to the accounts% giving the s'lit bet&een: salaries and sti'ends em'loyer/s national insurance costs and em'loyer/s 'ension contributions.
):9
E+o'!+ent# o$ hi.her paid #ta$$ A note should sho&% i! a''licable% the number o! em'loyees and cathedral clergy &hose emoluments !ell &ithin each band o! N10%000 !rom N60%000 u'&ards. =2moluments include sti'ends% !ees% &ages and salaries =ho&ever described and including those 'aid by the Church Commissioners>% holiday and sic6 'ay and the value o! ta7able bene!its in 6ind but not em'loyers/ 'ension contributions.> 8! no one
-1
has emoluments above N60%000 that !act should be stated. 8n addition% 'ension details must be disclosed in total !or higher 'aid sta!!% as !ollo&s: ):4 *.-.1 Pen#ion# F<S 1" has radically changed the &ay 'ension liabilities under de!ined bene!it schemes% and the assets held to meet them% are re'orted. $hose cathedrals &hich o'erate such schemes !or their sta!! must com'ly &ith the standard. A''endi7 4 e7'lains ho& to re'ort on the 'ension schemes managed by the Church o! 2ngland ensions :oard. Re'ated party di#c'o#!re# Any material related 'arty transactions should be disclosed in accordance &ith F<S (% <elated arty Disclosures. <elated 'arty transactions occur &hen the cathedral% or any other entity included in the cathedral/s consolidated accounts% trans!ers assets or liabilities or receives or 'rovides services to or !rom a related 'arty% irres'ective o! &hether there is consideration. <elated 'arties are those &here one 'arty either can% or &ould a''ear to be in a 'osition to% control or in!luence the other% or both 'arties are sub5ect to common control or in!luence. <elated 'arties% in the conte7t o! cathedrals% include: +embers o! the cor'orate body =Council% Cha'ter and College o! Canons> +embers o! the same !amily or household o! 'ersons in the cor'orate body or o! related 'ersons &ho may be e7'ected to in!luence% or be in!luenced by% that 'erson in their dealings &ith the cathedral $he trustees o! any trust% not being a charity% the bene!iciaries or 'otential bene!iciaries o! &hich include 'ersons in the categories above or 'ersons connected &ith them Any business 'artner o! any 'erson in the categories above Any body cor'orate in &hich 'ersons in the categories above% ta6en together% have a 'artici'ating interest Any controlled entity or 5oint venture or associated underta6ing in &hich the cathedral has a 'artici'ating interest and any director o! such an entity Any charity or trust the ma5ority o! &hose trustees are 'ersons in the cor'orate body Any 'ension !und !or the bene!it o! any 'erson in the cor'orate body% or the em'loyees o! the cathedral% or any 'erson connected &ith the cathedral Any o!!icer% agent or em'loyee o! the cathedral having authority or res'onsibility !or directing or controlling the ma5or activities or resources o! the cathedral. em'loyersA contributions in the year to money 'urchase schemes the number o! sta!! to &hom retirement bene!its are accruing under money 'urchase and de!ined bene!it schemes res'ectively.
*.-.2 ):*.6.1
*.6.2
-2
*.6.#
$he in!ormation to be disclosed is: $he name=s> o! the transacting related 'arty or 'arties A descri'tion o! the relationshi' bet&een the 'arties =including the interest o! the related 'arty in the transaction> A descri'tion o! the transaction $he amounts involved 4utstanding balances &ith related 'arties at the balance sheet date and any 'rovisions !or doubt!ul debts !rom such 'ersons Any amounts &ritten o!! !rom such balances during the accounting year Any other elements o! the transactions% &hich are necessary !or the understanding o! the !inancial statements.
*.6.4
$he disclosure can be given in aggregate !or similar transactions and ty'e o! related 'arty unless disclosure o! an individual transaction or connected transactions is necessary !or an understanding o! the im'act o! the transactions on the accounts o! the cathedral. ;here the related 'arty is a member o! the Council% Cha'ter or College o! Canons% or a 'erson related to a member o! the Council% Cha'ter or College o! Canons% each related 'arty transaction must be se'arately disclosed. Some related 'arty transactions are such that they are unli6ely to in!luence the 'ursuance o! the se'arate inde'endent interests o! the cathedral. $hese need not be disclosed unless there is evidence to the contrary. 27am'les are: Donations received !rom a related 'arty so long as the donor has not attached a condition &hich &ould or might re9uire the cathedral to alter the nature o! its activities +inor or routine services 'rovided to the cathedral by 'eo'le connected &ith it $he 'urchase !rom the cathedral by a related 'arty o! minor articles% &hich are o!!ered !or sale on the same terms as are o!!ered to the general 'ublic.
*.6.-
*.6.6 8! !unds belonging to the cathedral have been used to 'urchase insurance: to 'rotect the cathedral !rom loss arising !rom the neglect or de!ault o! members o! the Council% Cha'ter or College o! Canons or o! its em'loyees or agentsE or to indemni!y the 'ersons above against the conse9uences o! any neglect or de!ault on their 'art these !acts and the cost involved should be disclosed. ):& Re+!neration o$ +e+ber# o$ the Chapter $he general rule !or charities is that charity trustees may not receive remuneration !or their services to the charity% &hether as trustees or !or other services. 8nter alia this e!!ectively means that em'loyees cannot be trustees. :ut the remunerated members o! the Cha'ter include the clerical members and% !re9uently and &ith the
-#
encouragement o! the Cathedrals +easure 1***% a s'eci!ied lay em'loyee o! the cathedral. Detailed disclosures are there!ore re9uired: $he individual remuneration o!% and 'ension 'rovision !or% each member o! the Cha'ter. 8! the cha'ter member is also em'loyed on diocesan duties% then the 'ro'ortions &hich re!lect their time s'ent on cathedral a!!airs should be given =in accordance &ith the amounts included in the S4FA and the note on total sta!! costs>. For diocesan clergy &hose duties do not e7tend beyond Cha'ter business% the amounts involved are li6ely to be immaterial. A statement that the remuneration o!% and 'ension 'rovision !or% clerical members o! the Cha'ter are 'aid in accordance &ith scales laid do&n annually by the Church Commissioners% the Archbisho's/ Council and the Church o! 2ngland ensions :oard% i! a''licable 8! any su''lement to those scales is 'aid by the cathedral by &ay o! either additional sti'end or e7'ense allo&ance =as o''osed to reimbursement o! s'eci!ic e7'enses>% the su''lemental amounts each receives must be included in the !igures disclosed. 8t &as recommended by the Archbisho'sA Commission on Cathedrals that su''lemental 'ayments be abolished in res'ect o! !uture a''ointments. ,nder the Cathedrals +easure 1***% such 'ayments re9uire the consent o! the Church Commissioners &here made to individuals &hose basic sti'ends the Commissioners are res'onsible under the +easure !or !unding $he aggregate numbers and aggregate remuneration o! these members o! the Cha'ter are to be included in the disclosures re9uired by 'aragra'hs *.2 and *.#.
):8
EDpen#e# o$ +e+ber# o$ the Chapter $he aggregate amount o! e7'enses reimbursed by the cathedral% the nature o! those e7'enses =e.g. travel% entertainment etc> and the number o! 'ersons to &hom e7'enses &ere 'aid should be disclosed.
):)
A!ditor#3 re+!neration $he total cost to the cathedral o! the remuneration =!ees and reimbursed e7'enses> o! the auditors o! all the entities included in the cathedral/s consolidated accounts should be disclosed in the notes to the accounts% sho&ing se'arately remuneration !or: audit servicesE and other services% such as ta7ation advice% consultancy% !inancial advice% accountancy and boo6 6ee'ing.
):(,
G!arantee# Details should be given o! any guarantees given by the cathedral or other entities included in the consolidated accounts and o! any charges given on any o! the assets o! the cathedral or entities included in the consolidation.
-4
):((
Co++it+ent# Disclosure should be made in the notes o! the amount o! !uture ma5or e7'enditure =both ca'ital and revenue> and any material charitable commitments Details o! ho& the e7'enditure is to be !unded% including related grants not yet received% should also be disclosed Commitments to 'ay !uture 'ensions and other 'ost retirement bene!its should be dealt &ith in accordance &ith F<S 1"% <etirement :ene!its.
):(%
Con#o'idated entitie# Any material internal trans!ers bet&een a Cha'ter and a connected entity% =e.g. a choir school% education centre or other enter'rise>% &hich are eliminated on consolidation% such as !ees or rents% should be disclosed in a note. Additional in!ormation% &hich assists in the understanding o! such transactions% should be included in the narrative% &here a''ro'riate.
--
(,
(,:(
SUMMAR> ACCOUNTS
;here summary accounts are 'ublished in addition to the !ull re'ort and accounts they should include a statement by the Cha'ter that they are summaries o! in!ormation e7tracted !rom the annual accounts. $he summary accounts should be !ormally a''roved by the Cha'ter o! the cathedral and signed and dated on its behal! by those &ho signed the balance sheet in the !ull audited accounts. $he summary accounts should contain in!ormation relating to the S4FA and the balance sheet. Any commentary included &ith the summary accounts should be consistent &ith the revie& o! activities in the !ull re'ort and accounts and not be misleading either by omission or amalgamation o! detail. $he summary accounts should also contain a statement to the e!!ect that they are Ga summary o! the audited accounts and may not contain su!!icient in!ormation !or a !ull understanding o! the !inancial a!!airs o! the cathedral. For !urther in!ormation the !ull annual accounts% the auditors/ re'ort on those accounts and the Cha'ter/s annual re'ort should be consulted. Co'ies o! these% &hich &ere a''roved on PdateQ% are available on re9uest !rom PaddressQ. $he auditors/ re'ort on the !ull accounts &as un9uali!iedG =see 'aragra'h 10.- belo&>. $he summary accounts should be accom'anied by a statement by the cathedral/s auditors that they are consistent &ith the !ull audited accounts. 8! the auditors/ re'ort &as 9uali!ied% then either a statement should be made to enable a reader to understand the signi!icance o! the auditors/ reservations% or the !ull te7t o! the auditors/ re'ort should be 'ublished &ith the summary accounts% together &ith any !urther e7'lanation that the auditors consider necessary. Any other summary !inancial in!ormation relating to the !inancial year &hich does not include in!ormation on the S4FA and the balance sheet must be accom'anied by a statement signed on behal! o! the Cha'ter as to: the 'ur'ose o! the in!ormationE &hether or not it is !rom the !ull annual accountsE &hether or not these accounts have been auditedE and details o! ho& the !ull annual accounts% the annual re'ort and the auditors/ re'ort can be obtained.
(,:%
(,:1
(,:9 (,:4
(,:-
-6
((
((:(
GLOSSAR>
Anci''ary b!i'din.# $he buildings attached to a Cathedral &ithin the red line% ie the boundary set out in the relevant 'lan attached to the 2cclesiastical 27em'tion =3isted :uildings and Conservation Areas> 4rder 1**4% such as the cha'ter house% cloisters and libraries. For valuation 'ur'oses% investment 'ro'erty% d&elling houses and 'ro'erties used solely !or commercial 'ur'oses% e.g. sho's and re!ectories are e7cluded even i! they are situated &ithin the red line.
((:%
Depreciated rep'ace+ent co#t 4! 'ro'erty R $he aggregate amount o! value o! the land !or the e7isting use or a notional re'lacement site in the same locality and the gross re'lacement cost o! the buildings and other site &or6s% !rom &hich a''ro'riate deductions may then be made to allo& !or the age% condition% economic or !unctional obsolescence% environmental and other relevant !actorsE all o! these might result in the e7isting 'ro'erty being &orth less in occu'ation than a ne& re'lacement. 4! tangible !i7ed assets other than 'ro'erty R $he cost o! re'lacing an e7isting tangible !i7ed asset &ith an identical or substantially similar ne& asset% !rom &hich a''ro'riate deductions are made to re!lect the value attributed to the remaining 'ortion o! total use!ul economic li!e o! the asset and the residual value at the end o! the assetAs use!ul economic li!e. $his is de!ined more !ully in F<S1-.
((:1
Herita.e a##et# Abbeys% monasteries% cathedrals% historic churches and ancient centres o! learning may not meet the heritage asset de!inition as the 'reservation o! the buildings they occu'y is unli6ely to be the 'rimary ob5ective o! the charity. Such assets might% nevertheless% be considered integral to the activities o! the charity and this may give rise to di!!iculties in ascertaining an estimate o! the current cost o! construction o! an asset that has the same service 'otential as the e7isting one. For e7am'le% a ne& structure could recreate the !loor area and seating ca'acity o! a medieval cathedral but such a structure &ould not recreate the uni9ueness o! the original in terms o! the religious and historic signi!icance. 8n such cases a valuation o! 'reviously non1 ca'italised assets may be im'ractical and the notes should contain a statement to that e!!ect e7'laining &hy conventional valuation techni9ues cannot be a''lied. Similar issues may arise in the conte7t o! arte!acts contained &ithin and associated &ith such structures% e.g. religious arte!acts contained &ithin a cathedral or historic church. =Charities S4< 200-% 'aragra'h 2*#>
((:9
Ina'ienab'e a##et# An asset &hich a cathedral is re9uired by la& to retain !or its o&n use or bene!it and cannot dis'ose o! &ithout e7ternal consent% &hether 'rohibited by the Statutes% the
-"
Cathedrals +easure% the donorAs &ishes or in some other &ay. 0ormally the asset &ill belong to the cathedralAs ?'ermanent endo&ment@% &here it is held on trusts &hich contem'late its retention and continuing use but not its dis'osal. Do&ever% in the case o! a gi!t1in16ind o! a ?&asting asset@% such as a building% a long lease or a non1durable arti!act% the terms o! trust may not have 'rovided !or its maintenance in 'er'etuity or its re'lacement. 8n that case the endo&ment &ill be e7'ended to the e7tent o! the aggregate amount o! its de'reciation or amortisation 'ro'erly 'rovided !or in the annual accounts =i.e. based on its currently antici'ated use!ul li!e>. $he !act that a 'ro'erty is inalienable does not mean that it should not a''ear on the balance sheet. ((:4 In*entory $he Care o! Cathedrals +easure 1**0 de!ines those items to be included in the inventory =see A''endi7 2>. $hese items are to be treated as heritage assets in cathedral accounts. ((:- In*e#t+ent property An investment 'ro'erty is an interest in land andIor buildings: in res'ect o! &hich construction &or6 and develo'ment have been com'letedE and &hich is held !or its investment 'otential% any rental income being negotiated at armAs length
$he !ollo&ing are e7ce'tions !rom the de!inition: a 'ro'erty &hich is o&ned and occu'ied by a cathedral !or its o&n 'ur'oses is not an investment 'ro'ertyE and a 'ro'erty let to and occu'ied by a com'any o&ned by the cathedral or a trust controlled by the cha'ter is not an investment 'ro'erty !or the 'ur'oses o! the cathedralAs o&n accounts or the consolidated accounts
((:&
Materia'ity
11.".1 +ateriality is the !inal test o! &hat in!ormation should be given in a 'articular set o! accounts. An item o! in!ormation is material to the accounts i! its mis1statement or omission might reasonably be e7'ected to in!luence the economic decisions o! users o! those accounts% including their assessments o! ste&ardshi'. 8mmaterial in!ormation &ill need to be e7cluded to avoid clutter &hich im'airs the understandability o! other in!ormation 'rovided. 11.".2 ;hether in!ormation is material &ill de'end on the siCe and nature o! the item in 9uestion 5udged in the 'articular circumstances o! the case. +ateriality is not ca'able o! general mathematical de!inition as it has both 9ualitative and 9uantitative as'ects. $he 'rinci'al !actors to be ta6en into account are set out belo&. 8t &ill usually be a combination o! these !actors% rather than any one in 'articular% that &ill determine materiality:
-(
$he itemAs siCe is 5udged in the conte7t both o! the accounts as a &hole and o! the other in!ormation available to users that &ould a!!ect their evaluation o! the accounts. $his includes% !or e7am'le% considering ho& the item a!!ects the evaluation o! trends and similar considerations. Consideration is given to the itemAs nature in relation to: o $he transactions or other events giving rise to it o $he legality% sensitivity% normality and 'otential conse9uences o! the event or transaction o $he identity o! the 'arties involved% and o $he 'articular headings and disclosures that are a!!ected.
8! there are t&o or more similar items% the materiality o! the items in aggregate as &ell as o! the items individually needs to be considered. 11.".# Cha'ter is res'onsible !or deciding &hether an item is or is not material. 8n cases o! doubt an item should be treated as material. 11.".4 $his 'rocess may result in di!!erent materiality considerations being a''lied de'ending on the as'ect o! the accounts being considered. For e7am'le% the e7'ected degree o! accuracy e7'ected in the case o! certain statutory disclosures e.g. the remuneration o! members o! cha'ter% may ma6e normal materiality considerations irrelevant.
-*
AppendiD ( THE FUNDS OF A CATHEDRAL

$he 'ur'ose o! this a''endi7 is to e7'lain the legal 'osition as regards the various !unds o! a cathedral and the im'lications this has !or the &ay in &hich the !unds are accounted !or. ( Unre#tricted $!nd#
,nrestricted !unds are e7'endable at the discretion o! the Cha'ter in !urtherance o! the ministry o! the cathedral. % De#i.nated F!nd#
$he Cha'ter may set aside 'art o! the cathedralAs unrestricted !unds to be used !or 'articular 'ur'oses in the !uture. Such !unds are called Gdesignated !undsG. $he designation has an administrative 'ur'ose only% and does not legally restrict the Cha'terAs discretion to reallocate such !unds to unrestricted !unds. 1 Re#tricted F!nd#
<estricted !unds are !unds sub5ect to s'eci!ic trusts% &hich may be declared by the donor=s>% or &ith their authority =e.g. in a 'ublic a''eal>% or by the cathedral statutes% but are still &ithin the ob5ects o! the cathedral. <estricted !unds may be restricted income !unds% &hich are e7'endable at the discretion o! the Cha'ter in !urtherance o! some 'articular as'ect o! the cathedral/s ministry. Alternatively% they may be ca'ital =ie endo&ment> !unds% &here the assets are re9uired to be invested% or retained !or actual use% rather than e7'ended =see 4 belo&. ;here !unds are 'rovided !or !i7ed assets the treatment o! the !i7ed assets ac9uired &ith those !unds &ill de'end on the basis on &hich they are held. $he terms on &hich the !unds are held may re9uire that the !i7ed asset &hich is 'rovided should be held by the cathedral on trust !or a s'eci!ic 'ur'ose. $hen the asset &ill !orm 'art o! restricted !unds% as &ill a !i7ed asset &hich has itsel! been given to the cathedral on trust !or a s'eci!ic 'ur'ose. $here is% ho&ever% no general rule and the treatment &ill de'end u'on the circumstances o! each individual case. 9 Endo"+ent F!nd#
A ca'ital !und &here there is no 'o&er to convert the ca'ital into income is 6no&n as a 'ermanent endo&ment !und% &hich must generally be held inde!initely. $his conce't o! G'ermanenceG does not ho&ever mean that the assets held in the endo&ment !und cannot be e7changed nor does it mean that they are inca'able o! de'reciation or loss. ;hat it does mean is that 'ermanent endo&ment cannot be used as i! it &ere income. Do&ever% certain 'ayments can be made out o! the endo&ment% such as the 'ayment o! investment management !ees &here these relate to investments held &ithin the endo&ment. ;here assets held in a 'ermanent endo&ment !und are e7changed% their 'lace in the !und must be ta6en by the assets received in e7change. G27changeG here may sim'ly mean a change o!
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investment% but it may also mean% !or e7am'le% the a''lication o! the 'roceeds o! sale o! !reehold land and buildings in the 'urchase or im'rovement o! !reehold 'ro'erty. 8ncome
8ncome derived !rom the investment o! ca'ital =endo&ment> !unds may be a''lied !or the general 'ur'oses o! the cathedral =unrestricted income>% unless a s'eci!ic 'ur'ose has been declared !or the a''lication o! the income !rom the ca'ital !und in 9uestion. Such income &ill be a''licable !or that 'ur'ose and &ill be restricted income. 27'enditure
Any e7'enses incurred in the administration% or 'rotection o! endo&ment investments should be charged to ca'ital. For e7am'le% the !ees o! someone &ho manages endo&ment investments% or the cost o! im'rovements to land held as an endo&ment investment. 4nly &here the trusts o! the charity 'rovide to the contrary% or there are insu!!icient !unds in the endo&ment to meet such costs% can they be charged against the other !unds held by the charity. Do&ever% &here charities have land held as endo&ment investments% then rent collection% 'ro'erty re'airs and maintenance charges &ould normally be charged against the relevant income !und as &ould the cost o! rent revie&s. Maluation !ees and other e7'enses incurred in connection &ith the sale o! such land &ould normally be charged to ca'ital% ie. against the gain =or added to the loss> realised on the dis'osal. Maluation !ees incurred !or accounting 'ur'oses &ould normally% in the case o! endo&ment investments% be charged to ca'ital and recorded in governance category o! resources e7'ended. All incoming resources derived !rom assets held as endo&ment investments should be included in the Statement o! Financial Activities. 0ormally the income !orms 'art o! the unrestricted !unds but i! the a''lication o! the income is restricted to a 'articular 'ur'ose the income and corres'onding e7'enditure should be a''ro'riately identi!ied in the restricted !unds. Any income not s'ent at the year end should be carried !or&ard in the a''ro'riate unrestricted or restricted !und. 4 Genera' point#
A##et Gain# and Lo##e# 8! a gain is made on the dis'osal o! an asset% the gain &ill !orm 'art o! the !und in &hich the asset &as held. An unrealised gain on an asset &ill also !orm 'art o! the !und in &hich the asset is held. Similarly unrealised losses and 'rovisions !or de'reciation and im'airment o! an asset &ill reduce the !und in &hich the asset is =or% in the case o! a realised loss% &as> held. 8n order to ensure that gains% losses and 'rovisions are added to or deducted !rom the correct !und it is there!ore essential to 6no& &hich assets and liabilities are held in &hich !und.
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Re#tricted Inco+e and EDpendit!re $he trustees o! a charity &ill be in breach o! trust i! they e7'end restricted income other&ise than in !urtherance o! that as'ect or those as'ects o! the ob5ects o! the charity to &hich e7'enditure is restricted. 8t is there!ore essential that due care is ta6en to s'end out o! a 'articular restricted income !und only &here the trusts so 'ermit. 27'enditure may be charged to a restricted !und &hich is not at the time in credit% or not in su!!icient credit% &here there is a genuine antici'ation o! recei'ts &hich can 'ro'erly be credited to the !und in order to meet the e7'enditure =e.g. &here a decision has been ta6en to invite donations !or that !und>. $he !und &hich is actually dra&n u'on to !inance the e7'enditure should be held u'on trusts &hich are &ide enough to 'ermit the e7'enditure =in case the e7'ected recei'ts do not materialise>. Do&ever% i! e7'enditure has been charged to an unrestricted !und% it should not subse9uently be recharged to restricted !und recei'ts sim'ly in order to increase the !und o! unrestricted income. F!nd A##et# and Liabi'itie# 8t is also im'ortant !or the trustees to ensure that the assets and liabilities held in a !und are consistent &ith the !und ty'eE i! a !und &hich% because o! donor restrictions% must be a''lied in the short term is re'resented by assets &hich cannot reasonably be e7'ected to be realised in the short term% there is a real 'ossibility that the charity &ill not be able to a''ly the !unds as directed. Inco+e App'ication ;here restricted income has been invested 'rior to a''lication !or a suitable charitable 'ur'ose% any incomeIgains derived !rom the investment &ill be added to% and !orm 'art o!% the restricted income !und in 9uestion. 8ncome derived !rom the investment o! ca'ital =endo&ment> !unds may be a''lied !or the general 'ur'oses o! the charity =unrestricted income>% unless a s'eci!ic 'ur'ose has been declared by the donor !or the a''lication o! the income !rom the ca'ital !und in 9uestion. Such income &ill be a''licable !or that 'ur'ose and &ill be restricted income. .ains !rom the realisation o! investments in a ca'ital =endo&ment> !und !orm 'art o! the !und itsel!.
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AppendiD % CARE OF CATHEDRALS MEASURE ()), CARE OF CATHEDRALS 5AMENDMENT6 MEASURE %,,4
( $he !ollo&ing is a brie! summary o! the Care o! Cathedrals +easure 1**0 and Care o! Cathedrals =Amendment> +easure 200- in so !ar as they are relevant to the e7clusion o! the cathedral building and the items included in its inventory !rom the cathedral/s balance sheet. % $he Care o! Cathedrals +easure 1**0 is designed to ma6e 'rovision !or the care and conservation o! cathedral churches. 8t establishes a Cathedrals Fabric Commission =the Commission> and re9uires each cathedral to set u' a Fabric Advisory Committee. 0o &or6 may be carried out on the cathedral that &ould materially a!!ect its architectural% archaeological% artistic or historic character% nor may any ob5ect o! architectural% archaeological or artistic interest be sold% lent or dis'osed o! &ithout the a''roval o! either the Commission or the Fabric Advisory Committee =FAC>. 1 $he +easure sets out in detail ho& this a''roval is to be obtained.
9 $he cathedral architect must re'ort to the Cha'ter and to the Commission every !ive years on the &or6 &hich he considers &ill need to be carried out as soon as 'racticable =s14>. 4 $he cathedral/s FAC consists o! an e9ual number o! members a''ointed by the Cha'ter and the Commission. $he Commission/s nominees &ill have s'ecial 6no&ledge o! the care and maintenance o! buildings o! outstanding architectural or historic interest and a 'articular interest in the cathedral concerned =Sch 2 =1> o! the +easure>. $he Cha'ter is re9uired to maintain an inventory o! all items considered by the FAC to be o! architectural% archaeological% artistic or historic interest in the 'ossession o! the cathedral church =s 1#>. $he !orm o! the inventory is s'eci!ied by the Commission. $he sale% loan or other dis'osal o! an ob5ect included in the inventory re9uires a''roval !rom the cathedral/s Fabric Advisory Committee. 8! the item is o! outstanding interest% then a''roval is re9uired !rom the Cathedrals Fabric Commission. & GAn ob5ect o! architectural% archaeological% artistic or historic interest@ should be ta6en to be any ob5ect o! intrinsic merit in these !ields% or any ob5ect &hich in some &ay elucidates or e7tends the current 6no&ledge or understanding o! the architectural% archaeological% artistic or historic heritage o! a cathedral church and its !oundation% or &hich is illustrative o! its contribution to ecclesiastical or &ider historyG =Advisory .uidelines% #iii% Cathedrals Fabric Commission% 1**2>. 8tems to be recorded in the inventory include altars% !onts% !urnishings% 'late o! 'recious metals% other vessels and ornaments% vestments% te7tiles and embroideries% musical instruments =e.g. organs>% bells% cloc6s and dials% monuments% 'aintings% &indo&s% tiles and ceramics =see A''endi7 1 to Advisory .uidelines !or a chec6list o! 'ossible categories and ty'es o! ob5ect>. 8 Some cathedrals may have 're'ared asset registers or other lists o! all their 'ossessions% including e.g. chairs and audiovisual e9ui'ment. Such lists should not be con!used &ith the inventory re9uired by the +easure.
6#
$he +easure is su''orted by detailed rules =Care o! Cathedrals <ules 1**0 =S8 1**0 0o 2##->% to be u'dated by the Care o! Cathedral <ules 2006> and directions and guidelines issued by the Commission. All these documents should be re!erred to i! it is necessary to obtain a !uller understanding o! the sub5ect.
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AppendiD 1 APPLICATION OF ACCOUNTING STANDARDS TO CATHEDRAL ACCOUNTS

( As cathedral accounts must sho& a true and !air vie&% the accounts must be 're'ared in accordance &ith generally acce'ted accounting 'ractice% as embodied in accounting standards. % 8n this conte7t% the term /accounting standards/ includes all !inancial re'orting standards =F<Ss> issued by the Accounting Standards :oard =AS:> and all statements o! standard accounting 'ractice =SSA s> develo'ed by its 'redecessor body% the Accounting Standards Committee. ;here a''ro'riate% com'liance &ith accounting standards &ould also include !ollo&ing the 'ronouncements issued by the ,rgent 8ssues $as6 Force =,8$F> on behal! o! the Accounting Standards :oard. 1 From time to time% the AS: issues ne& 'ro'osals in the !orm o! discussion 'a'ers and e7'osure dra!ts% &ith a vie& to develo'ing ne& or revised accounting standards. Such documents are issued !or consultation and the re9uirements 'ro'osed should not be ado'ted 'rematurely &here this &ould involve inconsistency &ith an e7isting accounting standard. 9 $he 'ur'ose o! this a''endi7 is to 'rovide an indication o! the 'robable im'act on cathedral accounts o! each o! the documents described above. ;here relevant% re!erence should al&ays be made to the underlying documents. $he !ollo&ing summaries list the titles and re!erence numbers o! current SSA s% F<Ss and ,8$F Abstracts% together &ith a brie! indication o! their content and comments regarding the e7tent to &hich each document is li6ely to be a''licable to cathedral accounts.
6-
State+ent# o$ Standard Acco!ntin. Practice 5SSAP#6 SSAP# 0ithdra"nF 1% 2% #% 6% "% (% 10% 11% 12% 14% 1-% 16% 1"%1(% 22% 2# and 24 SSAP 9 Acco!ntin. $or .o*ern+ent .rant# Deals &ith the accounting treatment and disclosure o! government grants and other !orms o! government assistance% including grants% e9uity !inance% subsidised loans and advisory assistance. 8t is also indicative o! best 'ractice !or accounting !or grants and assistance !rom other sources. The regulations provide the most appropriate interpretation of SSAP 4 Acco!ntin. $or *a'!e added taD Follo&s the general 'rinci'le that the treatment o! MA$ in the accounts should re!lect an entity/s role as a collector o! the ta7 and MA$ should not be included in income or in e7'enditure &hether o! a ca'ital or revenue nature. Do&ever &here the MA$ is irrecoverable% it should be included in the cost o! the items re'orted in the !inancial statements. !ll cathedrals #ill suffer irrecovera$le %!T $ecause the& have a mixture of activities #hich are 'ero and standard rated, exempt and outside the scope of %!T. The irrecovera$le tax should $e included in the relevant cost headings on the face of the statement of financial activities and not sho#n as a separate item, although separate disclosure of the amount should $e made in the notes to the accounts, if material. SSAP ) StocE# and 'on.Ater+ contract# .ives guidance on the values to be included in the balance sheet o! stoc6s and long1term contracts and the criteria !or recognition o! income and e7'enditure on such items &ithin the Statement o! Financial Activities. !pplica$le to cathedrals. SSAP (1 Acco!ntin. $or re#earch and de*e'op+ent rovides guidance on three broad categories o! activity% namely 'ure research% a''lied research and develo'ment. $he standard de!ines these categories and s'eci!ies the accounting 'olicies that may be !ollo&ed !or each. (nli)el& to $e applica$le to cathedrals. SSAP () Acco!ntin. $or in*e#t+ent propertie# <e9uires investment 'ro'erties to be included in the balance sheet at their o'en mar6et value% but &ithout charging de'reciation. !pplica$le to cathedrals. !" 4 for cathedrals.
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SSAP %, Forei.n c!rrency tran#'ation Sets out the accounting treatment !or transactions denominated in a !oreign currency and !or the translation o! results and !oreign currency balances o! !oreign enter'rises to be included in the grou' accounts. The translation aspects of !" 20 are not li)el& to $e applica$le to cathedrals, although the standard could $e relevant to individual transactions denominated in a foreign currenc&. SSAP %( Acco!ntin. $or 'ea#e# and hire p!rcha#e contract# Describes ho& to identi!y and account !or !inance leases% o'erating leases and hire 'urchase contracts% both !or the lessee and the lessor. !pplica$le to cathedrals. SSAP %4 Se.+enta' reportin. *ot applica$le to cathedrals.
6"
Financia' Reportin. Standard# 5FRS#6 FRS ( Ca#h $'o" #tate+ent# 5re*i#ed ())-6 <e9uires re'orting entities &ithin its sco'e =being t&o o!: more than N-.(m gross turnover% more than N2.(m gross assets% more than an average o! -0 em'loyees> to 're'are a cash !lo& statement in the manner set out in the F<S. !pplica$le to cathedrals. FRS % Acco!ntin. $or #!b#idiary !ndertaEin.# Sets out the conditions under &hich an entity 9uali!ies as a 'arent underta6ing &hich should 're'are consolidated !inancial statements !or its grou'% the 'arent and its subsidiaries. 8t also sets out the manner in &hich consolidated !inancial statements are to be 're'ared. !pplica$le to cathedrals. FRS 1 Reportin. $inancia' per$or+ance <e9uires a layered !ormat !or the 'ro!it and loss account s'lit bet&een continuing% ne&ly ac9uired and discontinued o'erations. 8t has e!!ectively outla&ed e7traordinary items. $he standard also re9uires a statement o! total recognised gains and losses to be sho&n as a 'rimary statement. A note o! historical 'ro!its as a memorandum item is also re9uired% as is the disclosure o! earnings 'er share. The statement of financial activities com$ines $oth the profit and loss account and the statement of total recognised gains and losses. +xceptional items should $e disclosed on a separate line #ithin the activit& to #hich the& relate. +arnings per share is not relevant to cathedrals. FRS 9 Capita' in#tr!+ent# <e9uires ca'ital instruments to be 'resented in !inancial statements in a &ay that re!lects the obligations o! the issuer and the im'act on shareholdersA e9uity. *ot generall& applica$le to cathedrals, unless the& have $orro#ings. FRS 4 Reportin. the #!b#tance o$ tran#action# <e9uires that the substance o! an entity/s transactions is re'orted in its !inancial statements. $his re9uires that the commercial e!!ect o! a transaction and any resulting assets% liabilities% gains and losses are sho&n and that the accounts do not merely re'ort the legal !orm o! a transaction. +ost 'arts o! this standard are su'erseded by F<S 2!pplica$le to cathedrals.
6(
FRS - AcC!i#ition# and +er.er# Sets out the circumstances in &hich the t&o methods o! accounting !or a business combination =ac9uisition accounting and merger accounting> are to be used. $he F<S sets out !ive criteria that must be met !or merger accounting to be used. 8! they are not met then ac9uisition accounting should be used. (nli)el& to $e applica$le to cathedrals. FRS & Fair *a'!e# in acC!i#ition acco!ntin. Sets out the 'rinci'les o! accounting !or a business combination under the ac9uisition method o! accounting. 8t e7'lains &hat Gidenti!iable assets and liabilitiesG means and ho& to determine their !air values. $he di!!erence bet&een the sum o! these !air values and the cost o! ac9uisition is recognised as good&ill or negative good&ill. (nli)el& to $e applica$le to cathedrals. FRS 8 Re'ated party di#c'o#!re# Determines &ho and &hat are Grelated 'artiesG and the disclosures necessary to dra& attention to the 'ossibility that the re'orted !inancial 'osition and results may have been a!!ected by the e7istence o! related 'arties and by material transactions &ith them. !pplica$le to cathedrals. FRS ) A##ociate# and oint *ent!re# Sets out the de!initions and accounting treatments !or associates and 5oint ventures: t&o ty'es o! interests that a re'orting entity may have in other entities. $he F<S also deals &ith 5oint arrangements that are not entities. !pplica$le to cathedrals. FRS (, Good"i'' and intan.ib'e a##et# <e9uires 'urchased good&ill and intangible assets =&here mar6etable> to be ca'italised on the balance sheet and amortised over their lives% normally regarded as 20 years% sub5ect to im'airment revie&s. (nli)el& to $e applica$le to cathedrals. FRS (( I+pair+ent o$ $iDed a##et# and .ood"i'' Sets out the 'rinci'les and methodology !or accounting !or im'airments o! !i7ed assets and good&ill. $he carrying amount o! an asset is com'ared &ith its recoverable amount and% i! the carrying amount is higher% the asset is &ritten do&n. <ecoverable amount is de!ined as the higher o! the amount that could be obtained by selling the asset =net realisable value> and
6*
the amount that could be obtained through using the asset =value in use>. 8m'airment tests are only re9uired &hen there has been some indication that an im'airment has occurred. !pplica$le to cathedrals. FRS (% Pro*i#ion#; contin.ent 'iabi'itie# and contin.ent a##et# Describes the circumstances in &hich a 'rovision =a liability that is o! uncertain timing or amount> may arise and ho& it should be measured and recognised in the !inancial statements. 8t also describes ho& to account !or contingent assets and liabilities. !pplica$le to cathedrals. FRS (1 Deri*ati*e# and other $inancia' in#tr!+ent#F di#c'o#!re# S'eci!ies the disclosure !or !inancial instruments =such as s&a's% !or&ards% ca's and collars and other derivatives> by !ocusing on the &ay in &hich they are used by the re'orting entity. *ot applica$le to cathedrals. FRS (9 Earnin.# per #hare *ot applica$le to cathedrals. FRS (4 Tan.ib'e $iDed a##et# Sets out the 'rinci'les o! accounting !or tangible !i7ed assets% &ith the e7ce'tion o! investment 'ro'erties. 8n 'rinci'le all !i7ed assets should be ca'italised at cost or at revalued amount. Do&ever% &here an enter'rise chooses to ado't a 'olicy o! revaluing some assets% all assets o! the same class must be revalued and the valuations 6e't u' to date. The principles of ,- 1. are generall& applica$le to cathedrals and are incorporated in the -egulations. There are relaxed criteria for the valuations of cathedral assets, and certain heritage assets need not $e capitalised in certain circumstances /paragraph 7.20. FRS (- C!rrent taD *ot applica$le to cathedrals. FRS (& Retire+ent bene$it# Sets out the accounting treatment !or retirement bene!its such as 'ensions and medical care during retirement. 8ts main re9uirements are: 'ension scheme assets are measured using !air values 'ension scheme liabilities are measured using a 'ro5ected unit method and discounted at an e9uivalent high 9uality cor'orate bond rate the 'ension scheme sur'lus =to the e7tent it can be recovered> or de!icit is recognised on the balance sheet
"0
$he movement in the scheme sur'lusIde!icit is analysed into: o the current service cost and any 'ast service costsE these are recognised &ithin e7'enditure on generating !unds and on mission o the interest cost and e7'ected return on assetsE these are recognised as other !inance costs &ithin e7'enditure on generating !unds and on mission o actuarial gains and lossesE these are recognised as an additional item included in other recognised gains =losses>. +ore detail is 'rovided in A''endi7 4.
!pplica$le to cathedrals in respect of their emplo&ees, $ut not the clerg&. 1o#ever, the standard does not cover the provision of voluntar& retirement $enefits, #hich are provided $& some cathedrals. 2t ma& $e more appropriate to use designated funds to reflect such discretionar& funding arrangements. FRS (8 Acco!ntin. po'icie# F<S 1( sets out the 'rinci'les to be !ollo&ed in selecting accounting 'olicies and the disclosures needed to hel' users to understand the accounting 'olicies ado'ted and ho& they have been a''lied. 8ts ob5ective is to ensure that: an entity ado'ts the accounting 'olicies most a''ro'riate to its 'articular circumstances !or the 'ur'oses o! giving a true and !air vie&E the accounting 'olicies ado'ted are revie&ed regularly to ensure that they remain a''ro'riate% and are changed &hen a ne& 'olicy becomes more a''ro'riate to the entityAs 'articular circumstancesE and su!!icient in!ormation is disclosed in the !inancial statements to enable users to understand the accounting 'olicies ado'ted and ho& they have been im'lemented.
8t re9uires disclosure o! the e7tent to &hich !inancial statements com'ly &ith any relevant S4< . ;here an entityAs !inancial statements !all &ithin the sco'e o! a S4< % the entity should state the title o! the S4< and &hether its !inancial statements have been 're'ared in accordance &ith the S4< As 'rovisions currently in e!!ect. 8n the event o! a de'arture% the entity should give a brie! descri'tion o! the de'arture !rom recommended 'ractice% the reasons &hy the treatment ado'ted is 5udged more a''ro'riate% details o! any disclosures recommended by the S4< that have not been 'rovided and the reasons &hy they have not been 'rovided. $he a''ro'riateness o! accounting 'olicies ado'ted are 5udged against the ob5ectives o!: relevance% reliability% com'arability% and understandability
!pplica$le to cathedrals.
"1
FRS () De$erred taD <e9uires !ull 'rovision to be made !or de!erred ta7 assets and liabilities arising !rom timing di!!erences bet&een the recognition o! gains and losses in the !inancial statements and their recognition in a ta7 com'utation. 3a& $e applica$le to certain taxa$le trading activities reported in cathedral accounts. !dvice should $e sought from professional advisers if it is thought that this ma& $e the case. FRS %, Shareba#ed Pay+ent# *ot applica$le to cathedrals. FRS %( 5IAS (,6 Po#t 7a'ance Sheet e*ent# F<S 21 sets out the recognition and measurement re9uirements !or t&o ty'es o! event a!ter the balance sheet date: $hose that 'rovide evidence o! conditions that e7isted at the balance sheet date !or &hich the entity shall ad5ust the amounts recognised in its !inancial statements or recognise items that &ere not 'reviously recognised =ad5usting events>. For e7am'le% the settlement o! a court case that con!irms the entity had a 'resent obligation at the balance sheet date $hose that are indicative o! conditions that arose a!ter the balance sheet date !or &hich the entity does not ad5ust the amounts recognised in its !inancial statements =non1ad5usting events>. For e7am'le% a decline in mar6et value o! investments bet&een the balance sheet date and the date &hen the !inancial statements are authorised !or issue.
!pplica$le to cathedrals. FRS%% 5IAS 116 Earnin.# per #hare *ot applica$le to cathedrals. FRS%1 5IAS %(6 The E$$ect# o$ Chan.e# o$ Forei.n EDchan.e Rate# A cathedral may have transactions in !oreign currencies. $his standard 'rescribes ho& cathedrals should include !oreign currency transactions. 3ight $e applica$le to cathedrals. FRS%9 5IAS %)6 Financia' Reportin. in Hyperin$'ationary econo+ie# *ot applica$le to cathedrals.
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FRS%4 5IAS 1%6 Financia' In#tr!+ent#F Di#c'o#!re and Pre#entation $he ob5ective o! F<S 2- is to enhance the understanding o! users o! accounts o! the signi!icance o! !inancial instruments to an entityAs !inancial 'osition% 'er!ormance and cash !lo&. The disclosure re4uirements appl& to cathedrals appl&ing ,- 25 onl&. FRS%- 5IAS 1)6 Financia' In#tr!+ent#F Mea#!re+ent $his standard im'lements in !ull the measurement and hedge accounting 'rovisions o! 8AS #* as 'ublished by the 8nternational Accounting Standards :oard. !pplica$le to cathedrals that are companies and adopt an accounting polic& that measures financial instruments at fair value for accounting periods $eginning on or after 1 6anuar& 2005. FRS %& Li$e A##!rance *ot applica$le to cathedrals. FRSSE Financia' Reportin. Standard $or S+a''er Entitie# :rings together the relevant accounting re9uirements and disclosures !rom the other accounting standards and ,8$F abstracts% sim'li!ied and modi!ied as a''ro'riate !or smaller entities. $he F<SS2 is an o'tional standard% but entities ado'ting it are e7em't !rom a''lying all the other accounting standards and ,8$F abstracts. From time to time% the AS: u'dates the F<SS2 to ta6e into account ne& accounting standards. (nli)el& to $e of value to cathedrals.
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Ur.ent I##!e# Ta#E Force 5UITF6 Ab#tract# UITF# 0ithdra"nF 1% 2% #% 6% "% (% 10% 12% 1#% 14% 16 and 20 UITF Ab#tract 9 Pre#entation o$ 'on.Ater+ debtor# in c!rrent a##et# Such items should be se'arately disclosed on the !ace o! the balance sheet or in the notes to the accounts. !pplica$le to cathedrals. UITF Ab#tract 4 Tran#$er# $ro+ c!rrent a##et# to $iDed a##et# !pplica$le to cathedrals $ut unli)el& to arise in practice. UITF Ab#tract ) Acco!ntin. $or operation# in hyperAin$'ationary econo+ie# 7ill not $e applica$le to cathedrals. UITF Ab#tract (( Capita' in#tr!+ent#F i##!er ca'' option# *ot applica$le to cathedrals. UITF Ab#tract (4 Di#c'o#!re o$ #!b#tantia' acC!i#ition# *ot applica$le to cathedrals. UITF Ab#tract (& E+p'oyee #hare #che+e# *ot applica$le to cathedrals. UITF Ab#tract (8 Pen#ion co#t# $o''o"in. the ())& taD chan.e# in re#pect o$ di*idend inco+e <e9uires that any actuarial de!icit arising !rom not being able to reclaim ta7 credits on dividend income should be s'read !or&ard over the e7'ected remaining service lives o! em'loyees in line &ith SSA 24. !pplica$le to cathedrals. UITF Ab#tract () TaD on .ain# and 'o##e# on $orei.n c!rrency borro"in.# that hed.e an in*e#t+ent in a $orei.n enterpri#e *ot applica$le to cathedrals. UITF Ab#tract %( Acco!ntin. i##!e# ari#in. $ro+ the propo#ed introd!ction o$ the E!ro !pplica$le to cathedrals, if the (8 is to adopt the +uro.
"4
UITF Ab#tract %% The acC!i#ition o$ a L'oyd3# b!#ine## *ot applica$le to cathedrals. UITF Ab#tract %1 App'ication o$ the tran#itiona' r!'e# in FRS (4 rovides transitional rules on the use o! 'rior 'eriod ad5ustments &here tangible !i7ed assets% &hich &ere 'reviously treated as a single asset% are identi!ied as having t&o or more ma5or com'onents &ith substantially di!!erent use!ul economic lives. !pplica$le to cathedrals. UITF Ab#tract %9 Acco!ntin. $or #tartA!p co#t# Start1u' costs should be accounted !or on a basis consistent &ith the accounting treatment o! similar costs incurred in on1going activities. Start1u' costs that do not meet the criteria !or recognition as assets under a relevant accounting standard should be &ritten o!! as incurred. $hey should not be carried !or&ard as an asset. !pplica$le to cathedrals. UITF Ab#tract %4 Nationa' in#!rance contrib!tion# on #hare option .ain# *ot applica$le to cathedrals. UITF Ab#tract %- 7arter tran#action# $or ad*erti#in. An entity involved in 'ublishing or broadcasting may agree to 'rovide advertising in e7change !or advertising services 'rovided by its customers% rather than !or cash consideration. 8ncome !rom advertising underta6en on such a barter basis is only recognised &here 'ersuasive evidence e7ists that the advertising o''ortunity could have been sold !or an e9uivalent sum o! cash. !pplica$le to cathedrals. UITF Ab#tract %& Re*i#ion to e#ti+ate# o$ the !#e$!' econo+ic 'i$e o$ .ood"i'' and intan.ib'e a##et# A develo'ment o! F<S 10. (nli)el& to $e applica$le to cathedrals. UITF Ab#tract %8 Operatin. 'ea#e incenti*e# A lessor may 'rovide an incentive !or the lessee to enter into a ne& or rene&ed o'erating lease. 8t re9uires that the relevant income or e7'ense be recognised over the li!e o! the asset% or until a mar6et rent &ill be 'ayable% on a straight1line basis unless another systematic basis is more re'resentative o! bene!it !lo&s.
"-
!pplica$le to cathedrals. UITF Ab#tract %) 0eb#ite de*e'op+ent co#t# ;ebsites are used !or a variety o! activities% including 'romotion o! services and goods% ta6ing orders and 'rovision o! in!ormation. +any entities incur signi!icant costs in develo'ing such &ebsites. Certain &ebsite develo'ment costs may be ca'italised only &here they lead to the creation o! an enduring asset delivering bene!its at least as great as the amount ca'italised. !pplica$le to cathedrals. UITF Ab#tract 1, Date o$ a"ard to e+p'oyee# o$ #hare# or ri.ht# to #hare# *ot applica$le to cathedrals. UITF Ab#tract 1( EDchan.e# o$ b!#ine## or other nonA+onetary a##et# $or an intere#t in a #!b#idiary; oint *ent!re or a##ociate <e9uires the entity that sells a business or other non1monetary assets to another 'arty !or shares in that other 'arty% to recognise a gain or de!icit on the dis'osal and good&ill on the ac9uisition. !pplica$le to cathedrals. UITF Ab#tract 1% E+p'oyee bene$it tr!#t# and other inter+ediate pay+ent arran.e+ent# $his abstract a''lies &hen an entity sets u' and trans!ers !unds to an em'loyee bene!it trust =or other intermediary> and the trustAs accumulated assets are used to remunerate the entityAs. *ot generall& applica$le to cathedrals. UITF Ab#tract 11 Ob'i.ation# in capita' in#tr!+ent# Concerns the classi!ication =liability or shareholdersA !unds> o! ca'ital instruments &hich can be redeemed by the issue o! shares. 2t can onl& $e relevant to a cathedral if a trading su$sidiar& issues such instruments. UITF Ab#tract 19 PreAcontract co#t# $his abstract is intended to bring consistency to the treatment o! costs incurred in bidding !or and securing contracts to su''ly 'roducts or services. 8t re9uires that costs &hich are incurred be!ore it is virtually certain that a contract &ill be obtained% be charged immediately as e7'enses. Directly attributable costs incurred a!ter that 'oint should be recognised as an asset and charged as e7'enses during the 'eriod o! the contract. !pplica$le to cathedrals.
"6
UITF Ab#tract 14 DeathAinA#er*ice and incapacity bene$it# $his Abstract clari!ies the accounting re9uired by F<S 1" B<etirement :ene!itsA !or the cost o! death1in1service and inca'acity bene!its% &here such bene!its are 'rovided through a de!ined bene!it 'ension scheme. $he Abstract re9uires that% &here the bene!its are not &holly insured% the uninsured scheme liability and the cost !or the accounting 'eriod should be measured% in line &ith other retirement bene!its% using the 'ro5ected unit method. $he e!!ect is that the valuation o! uninsured bene!its re!lects the current 'eriodAs 'ortion o! the !ull bene!its ultimately 'ayable in res'ect o! current members o! the schemeE the cost o! insured bene!its is determined by the relevant insurance 'remiums. !pplica$le to cathedrals. UITF Ab#tract 1- Contract# $or #a'e# o$ capacity *ot applica$le to cathedrals. UITF Ab#tract 1& P!rcha#e and #a'e o$ o"n #hare# *ot applica$le to cathedrals. UITF Ab#tract 18 Acco!ntin. $or ESOP Tr!#t# *ot applica$le to cathedrals.
""
AppendiD 9 FRS (& AND PENSION SCHEMES MANAGED 7> THE CHURCH OF ENGLAND PENSIONS 7OARD
( ,nder 'aragra'h * o! F<S 1" &here more than one em'loyer 'artici'ates in a de!ined bene!it scheme each em'loyer has to com'ly &ith the re9uirements relating to de!ined bene!it schemes unless conditions =as set out in either 'art =a> or 'art =b> o! 'aragra'h *> e7ist &hich enable each em'loyer to account 5ust !or contributions to the scheme as though it &ere a de!ined contribution scheme% &ith the addition o! a suitable disclosure note. C'er.y pen#ion# % Clergy 'ensions in res'ect o! service be!ore #1 December 1**" are the liability o! the Church Commissioners. 1 ensions in res'ect o! service a!ter that date are 'aid !rom the Church o! 2ngland Funded ensions Scheme to &hich the Church Commissioners and cathedrals contribute. $he Commissioners meet the contributions in res'ect o! those clergy &hose sti'ends they meet and cathedrals o! those clergy &hose sti'ends they meet. Lay #ta$$ pen#ion# 9 $he lay sta!! o! many cathedrals are members o! the Church ;or6ers ension Fund. $his !und has a de!ined bene!it section and a de!ined contribution section. 4 $hose cathedrals contributing to the Church o! 2ngland De!ined :ene!its Scheme &ill have to com'ly &ith F<S 1". $he Church o! 2ngland ensions :oard has been advised by the scheme actuary that the conditions o! 'art =b> o! 'aragra'h * are met in relation to this scheme. $hose cathedrals &hich o'erate de!ined bene!it schemes other than through the Church ;or6ers ension Fund &ill need to see6 advice !rom their scheme actuary or 'rovider on the a''ro'riate treatment under F<S 1". $he notes to the accounts should include the !ollo&ing in!ormation: the nature o! the scheme the date o! the most recent !ull actuarial valuation the contributions made in the accounting 'eriod and any agreed contribution rates !or !uture years the main !inancial assum'tions used at the beginning o! the 'eriod and at the balance sheet date the !air value o! scheme assets analysed bet&een e9uities% bonds and other assets and their e7'ected rates o! returns the 'resent value o! the scheme liabilities and the resulting sur'lus or de!icit com'ared &ith the !air value o! the scheme assets
"(
an analysis o! the amounts !or each o! the com'onent 'arts o! the de!ined bene!it costs charged or credited through the S4FA
=Charities S4< 200-% 'aragra'h 44->
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AppendiD 4 CATHEDRALS ADMINISTRATION AND FINANCE ASSOCIATION ACCOUNTS 0OR<ING GROUP
Me+ber# o$ the "orEin. .ro!p Andre& ;ebster =Chairman> 8an :urns Caroline <obinson Christo'her Da&s .erald Farmer +ichelle Oohnson Sue )ing Sue ace =Secretary> Secretariat Oan Da&son Oamie +il!ord Ta6i +ouden Church Commissioners Church Commissioners Church Commissioners Director o! Develo'ment Administrator Cha'ter $reasurer Financial and De'uty Secretary $reasurer Dead o! Finance Administrator Chie! Accountant Canterbury Cathedral Carlisle Cathedral Chelms!ord Cathedral Church Commissioners St AlbanAs Cathedral Salisbury Cathedral ;a6e!ield Cathedral Sor6 +inster
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Cathedrals Accounting Regulations

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ACCOUNTING AND REPORTING REGULATIONS FOR ENGLISH ANGLICAN CATHEDRALS prepared by the CATHEDRALS ADMINISTRATION AND FINANCE ASSOCIATION

Date issued: 10 February 2014

Copie# o$ the#e re.!'ation# +ay be obtained $ro+

A small charge may be levied.

Date issued: 10 February 2014

Entitie# to be inc'!ded in a cathedra'3# con#o'idated acco!nt#

#.2 #.# #.4

Date issued: 10 February 2014

Control +ethods o! accounting !or entities controlled by the Cha'ter

#.( #.* #.10

6.1 6.2 6.#

State+ent o$ Financia' Acti*itie# 5SOFA6

Date issued: 10 February 2014

$he cathedral% its ancillary buildings and the inventory ro'erty

Ca#h $'o" #tate+ent

Date issued: 10 February 2014

S!++ary acco!nt# G'o##ary

Date issued: 10 February 2014

Date issued: 10 February 2014

Date issued: 10 February 2014

Date issued: 10 February 2014

<ey to Abbre*iation# !#ed

A2C AS: CAFA F<S S4FA S4< SSA ,8$F

Date issued: 10 February 2014

Date issued: 10 February 2014

Date issued: 10 February 2014

Date issued: 10 February 2014

ENTITIES TO 7E INCLUDED IN A CATHEDRAL3S CONSOLIDATED ACCOUNTS

Date issued: 10 February 2014

Date issued: 10 February 2014

Date issued: 10 February 2014

Le*e' o$ bene$it to the cathedra'3# +ini#try

Contro''ed by the Chapter= >e# No 8JSJ3 8JSJ3 8J3

;hole artial Discretionary 0one

Date issued: 10 February 2014

Date issued: 10 February 2014

Date issued: 10 February 2014

9 THE ANNUAL REPORT

Date issued: 10 February 2014

Date issued: 10 February 2014

Date issued: 10 February 2014

Date issued: 10 February 2014

Tota' ret!rn on other in*e#t+ent#

FiDed intere#t B,,, 420 "0 =1> =2->

@ariab'e intere#t B,,,

Tota' B,,, 122* 164 =-> =24*>

Date issued: 10 February 2014

$otal return on other investments

Date issued: 10 February 2014

Date issued: 10 February 2014

STATEMENT OF FINANCIAL ACTI@ITIES 5SOFA6

Date issued: 10 February 2014

Gi$t Aid and reco*erab'e inco+e taD

Date issued: 10 February 2014

Date issued: 10 February 2014

Date issued: 10 February 2014

Date issued: 10 February 2014

0orEed eDa+p'e o$ SOFA

Date issued: 10 February 2014

Date issued: 10 February 2014

Date issued: 10 February 2014

Other inco+in. re#o!rce# In#!rance reco*erie#

Date issued: 10 February 2014

Cathedra' and precinct# !pEeep Ma or repair# and re#toration