King's College Hospital Charity - Annual Report & Accounts 2019-20 - Flipbook - Page 32
Apportionment of investment management costs
between funds (where this information is not provided
by the investment manager) is done pro rata according
to the respective market values.
With the exceptions of prepayments and deferred
income, all other debtor and creditor balances together
with investments are considered to be basic financial
instruments under FRS 102.
1.8. Social (mixed motive) investment
The Charity acquired a long leasehold property during
2017/18. It has been treated as a social (“mixed motive”)
investment as it was primarily acquired to contribute
to the overall mission of the Charity but The Trustees
are also satisfied that it provides an adequate financial
return. The social investment property is valued at
current open market value at the balance sheet date.
The revaluation gain/(loss) is credited/(charged) to the
Statement of Financial Activities.
Restricted funds comprise monies raised for, or
where their use is restricted to, a specific purpose, or
contributions subject to donor imposed conditions.
Unrestricted funds represent those monies which
are available for application towards achieving any
charitable purpose that falls within the charity’s
1.9. Cash and cash equivalents
Designated funds comprise unrestricted funds that
have been set aside by the Trustees and designated
for particular purposes.
Cash and cash equivalents include cash in hand,
deposits held at call with banks, other short-term
liquid investments with original maturities of three
months or less.
1.12. Critical accounting estimates
and areas of judgement
1.10. Financial instruments
The Charity has elected to apply the provisions of
Section 11 ‘Basic Financial Instruments’ and Section
12 ‘Other Financial Instruments Issues’ of FRS 102 to
all of its financial instruments. Financial instruments
are recognised in the company’s Balance Sheet
when the Charity becomes party to the contractual
provisions of the instrument. Financial assets and
liabilities are offset, with the net amounts presented
in the financial statements, when there is a legally
enforceable right to set off the recognised amounts
and there is an intention to settle on a net basis or to
realise the asset and settle the liability simultaneously.
1.11. Fund accounting
K I N G’ S CO L L E G E H O S P I TA L C H A R I T Y A N N UA L R E P O R T A N D A CCO U N T S 2 01 9/ 2 0
In preparing financial statements it is necessary to
make certain judgements, estimates and assumptions
that affect the amounts recognised in the financial
statements. The following judgements and estimates
are considered by the Trustees to have most significant
effect on amounts recognised in the financial
statements: the basis on which legacies are recognised
in the year (recognition takes place when receipt is
probable); the point at which grants payable from
designated funds are recognised as constructive
obligations and the value of the social investment
at its original cost.
In addition to the above, the full impact following
the recent emergence of the global COVID-19 pandemic
is still unknown. It is therefore not currently possible