Aberdeen based orchestras of fiddles and accordions that practice, perform and preserve traditional Scottish music.

Annual Report and Financial Statements for the Year ended 28 February 2012

Notes - Accounting policies

Notes to the accounts

1. Accounting Policies

General

These financial statements have been prepared under the historic cost convention (except for investments) and in accordance with the Financial Reporting Standard for Smaller Entities (effective April 2008), The Statement of Recommended Practice: Accounting and Reporting by Charities issued in March 2005 (the Charities SORP 2005), The Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006.

These accounting policies have been applied consistently throughout the current and previous periods.

Basis of recognition and allocation of expenditure

Expenditure is recognised on an accruals basis as a liability is incurred. Expenditure includes VAT which cannot be recovered and is reported as part of the expenditure to which it relates. Costs are charged directly to the most appropriate activity or category. Committee expenditure is allocated on the basis of where the majority of time is spent on activities.

Fixed assets, depreciation, donated fixed assets and heritage assets

The Society owns original music manuscripts which are considered historic heritage assets. These have not been capitalised in the balance sheet due to the difficulty in obtaining reliable cost information, as permitted by the Charities SORP 2005.

Assets which costs £100 or over are capitalised. Donated fixed assets are capitalised at their estimated value.

Provision for depreciation of fixed assets held for use by the Society is made at the following rates based on the estimated useful life of these fixed assets and their anticipated residual value:

  • String instruments, office & other equipment and trophies 10% per annum, reducing balance basis
  • Electronic instruments 10% per annum, straight line basis

Losses on disposal of fixed assets and reductions in the net book value of impaired fixed assets are treated as additional depreciation charges, which are reported within the appropriate resources expended section of the Statement of Financial Activities.

Investments

Investments are included at market value at the balance sheet date.

All gains and losses on investments are reflected in the Statement of Financial Activities as they arise and are not separated between realised and unrealised gains and losses.

Realised gains and losses on investments are the aggregate of the difference between sale proceeds and opening market value (or cost if purchased during the year). Unrealised gains and losses represent the movement in market value during the year.

Stocks

Stocks for resale are valued at the lower of cost and net realisable value.

Funds: Unrestricted, endowment and restricted income

Unrestricted funds consists of the general fund and designated funds. Designated funds are funds established by the committee from time to time for specific projects or purposes, are not in any way restricted and any surplus or deficit will be transferred to/from the general fund when the designated fund is closed.

Restricted funds (income and endowment) are funds subject to specific restrictions imposed by donors or by the purpose of the appeal. The purpose and use of designated, restricted income and endowment funds is set out in the notes to the financial statements.

Incoming resources:

  • Concert income consists of appearance fees, broadcast rights income and ticket sales from concerts organised by the Society. Income from advance ticket sales is treated as deferred income until the event has occurred. Hospitality during concert events received from promoters is excluded as permitted by the Charities SORP 2005 due to the difficulty in ascertaining value.
  • Donations income includes amounts received from non-commercial events such as church, nursing home and fundraising concerts which are considered donations in substance. Income is recognised on receipt. Also included is the estimated value of Gifts in kind and goods or services donated to the Society where the amounts are material, readily quantifiable and measurable. Such estimates are based on the market price the Society would otherwise have paid.
  • Donations of goods for resale are included in fundraising activities at the sale value, once sold.
  • Member subscriptions are considered to be donations in substance and are recognised on receipt.
  • Investment income – bank interest is recognised as it is earned and dividends when the investment is quoted ex-dividend. 
  • Gift Aid recoverable is included within the same category of income to which the Gift Aid claim relates in the same period in which that income is recognised.
  • Income from grants is recognised when entitlement is demonstrable, there is certainty regarding the amount and any conditions attached are wholly within the control of the Society.
  • Tours and trips includes income relating to the travel arrangements of specific concerts outwith the usual geographic area of the Society. Contributions to costs from members is treated as deferred income until the event has occurred.
  • No value has been attributed to the contribution of the members acting as volunteers playing at concerts. Refer to the annual report for more information on their contribution.

Resources expended:

  • Concert and competition expenditure includes the direct costs of concerts or competitions (such as venue hire, marketing, box offices fees, performing rights fees and artist fees) and indirect costs (such as provision of music, music skills workshops, introductory taster session for member recruitment and composition of harmony parts). Costs incurred in the preparation of concerts are treated as prepayments until the event has occurred.
  • Grants and donations - the objects of the Society include the option of the payment of grants or donations for charitable purposes at the discretion of the management committee.
  • Tours and trips includes expenditure relating to the travel arrangements of specific concerts outwith the usual geographic area of the Society. Costs are treated as prepayments until the event has occurred.
  • Governance costs include those costs associated with meeting the constitutional and statutory requirements of the Society and include the independent examination, costs relating to the committee and AGM meetings, and an allocation of committee expenses.
  • An amount equal to the donations income recognised on Gifts in kind (not for resale) and goods or services received free of charge is included within the most relevant category of expenditure to which the donation relates.
  • Investment management costs of common investments funds are deducted directly from the capital (80%) and income (20%) of the fund and are therefore not separately disclosed, as permitted by the Charities SORP.

Taxation

The Society is recognised as a charity by HM Revenue & Customs and therefore benefits from certain exemptions from taxation on income and gains, to the extent they are applied for charitable purposes. No tax charges have arisen in the Society. 

 

Our Scottish Music CDs

£10.00
Live at the Music Hall CD Cover Image
£10.00
From Dee to Don CD Cover Artwork
£10.00
Tuned to the North CD Cover Artwork

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