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 2010

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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.

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.

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:
Instruments, office equipment and trophies 10% per annum, reducing balance basis

The net book value of impaired assets is adjusted by additional depreciation charges which are reported within the appropriate heading of the Statement of Financial Activities.

Investments

Investments are recorded at market value.

Stocks

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

Unrestricted, endowment and restricted income

Unrestricted funds consists of the general purposes 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 purposes 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.
  • 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 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.

Joint arrangements

The Society occasionally enters into joint arrangements with other parties to share the costs and risks of concerts. In accordance with the Charities SORP 2005 where such joint arrangements are entered into the Society accounts for its contractually agreed share of the gross income and expenditure within the relevant lines of its own income and expenditure account.

Taxation

The Society is exempt from tax due on income and gains falling within section 505 of the Income & Corporation Taxes Act 1988 or section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objectives. No tax charges have arisen in the Society.

Change in accounting period – comparative figures

The accounting period end changed in the prior period. The current period financial statements and notes are for the year from 1 March 2009 to 28 February 2010. The comparative figures are for the 11 month period from 1 April 2008 to 28 February 2009. 

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