Rnib group annual report and accounts 2010/11


Notes to the financial statements for the year ended 31 March 2011



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Notes to the financial statements for the year ended 31 March 2011



1. Statement of accounting policies


The principal accounting policies adopted in the preparation of these financial statements are as follows:

1.1 Basis of preparation


The financial statements have been prepared under the historical cost convention, modified to include the revaluation of investments, in accordance with applicable accounting standards in the United Kingdom and the Statement of Recommended Practice – “Accounting and Reporting by Charities” (SORP 2005) as revised in May 2008, and the Charities Act 1993, as updated by the Charities Act 2006.

1.2 Group financial statements


The results of each of RNIB’s subsidiary undertakings, as listed in note 4, have been incorporated in these consolidated financial statements under the heading “Group” on a line-by-line basis, adopting uniform accounting policies. The term “Associated Charity” refers to organisations that have entered into a formal association agreement with RNIB. Their objectives contribute to those of the RNIB Group strategy and under the tests of control they are deemed to be charitable subsidiaries of RNIB.

The net assets at the date of association are assessed on a fair value basis for the purposes of consolidation into the results for the RNIB Group. The results of the subsidiaries acquired during the year are included in the SOFA from the effective date of acquisition. The intra-group transactions, balances and unrealised profits are eliminated in full. Any negative goodwill arising is written off in the year of acquisition and included as an incoming resource within the SOFA. Where specific assets are gifted to RNIB as part of the acquisition, these are treated as a donation and transferred to RNIB charity.

No separate Statement of Financial Activities (SOFA) has been presented for the Charity alone as permitted by paragraph 397 of the SORP.

1.3 Foreign currency transactions


Foreign currency transactions completed within the year are included at their transacted sterling equivalents. Assets and liabilities are valued using those rates published by HM Revenue & Customs as at the balance sheet date. Any foreign exchange gains or losses are charged to the SOFA.

1.4 Fund accounting

Unrestricted funds comprise accumulated surpluses and deficits on general funds that are available for use at the discretion of the trustees in furtherance of the general objectives of the Charity.

Designated funds are unrestricted funds that the trustees of the Charity have set aside, out of general funds and comprise sums of money for specific projects that can either be the updating of existing, or the development and piloting of new, charitable services.

Also within the designated funds are 'service properties' and 'other fixed assets'. 'Service properties' represents the value of RNIB’s interests in land and buildings, in use, for the provision of services to people with sight problems. This value is shown in a separate designated fund, as the properties represented are essential for the provision of RNIB’s services. Transfers in respect of additions to property in the year are made from the general fund and the development fund. Transfers are made from this fund to the general fund in respect of property disposals during the year. Property depreciation is charged to this fund. 'Other fixed assets' represents other assets in use by RNIB. The assets of associated charities are held within the restricted funds.

Restricted funds comprise income received with special conditions attached. Income for a specific purpose not spent in any year is carried forward in the relevant fund. Also within restricted funds are the results of the associated charities, which are operating under narrower objectives than those of RNIB.

Endowments received are credited directly to the relevant endowment fund. Income arising from the related investments is allocated to the general fund or to the relevant restricted fund, depending on the terms of endowment.


1.5 Incoming resources


Donated goods and services are included at the value to the Charity where these can be quantified. No amounts are included in these financial statements for the services donated by volunteers. Income from trading in subsidiary undertakings is transferred to the Charity by covenanting the profits of those undertakings. Donations are accounted for as soon as their amount and receipt is certain. Donations include Gift Aid based on amounts recoverable at the accounting date.
Legacy income is recognised on a receivable basis when there is sufficient evidence to provide necessary certainty that legacy income will be received and the value of the incoming resources can be measured with sufficient reliability.
Investment income, interest on deposits and income in connection with services to people with sight problems is recognised on an accruals basis. Where an incoming resource is received in advance of the activity to be performed then the incoming resource is deferred and included in creditors. Investment income arising on endowment funds is credited to the appropriate fund in accordance with the prescribed conditions.

1.6 Resources expended

(a) Expenditure, including irrecoverable VAT, is accounted for on an accruals basis.

(b) Included within charitable activity costs is an apportionment of public awareness expenditure representing the costs incurred by RNIB in educating the public to be aware of the needs of people with sight loss.

(c) Support costs include both group and corporate costs and are incurred in support of direct service expenditures. Allocation of support service costs is on a mixture of bases including a staff time-based system of apportionment.

(d) Fundraising expenses include those costs incurred in raising donations and legacies.

(e) Governance costs are incurred in relation to the running of the Charity. This includes strategic planning and attending to the statutory affairs of the Charity.

(f) Grants payable are charged to the SOFA when a constructive obligation exists, that is when the recipient has been informed.


1.7 Fixed assets


Tangible assets are recorded at cost, including irrecoverable VAT, or where donated, open market valuation at the time of donation. Under the transitional provisions of Financial Reporting Standard 15 (FRS15), RNIB has adopted the valuations of properties as at 31 March 1999, where known, as cost and these will not be updated. Where assets are acquired through entering into Association agreements, then the cost of these, are included at their fair value as at the agreement date. Assets in the course of construction are transferred to the relevant category of asset and depreciated when practical completion is achieved. The minimum threshold for capitalisation is £2,500.

Depreciation is provided on all tangible fixed assets, except freehold land and assets under construction, at rates calculated to write off the cost on a straight-line basis over their expected useful lives. Where the assets have been acquired under a finance lease then depreciation, and any impairment, is provided at rates calculated to write off the cost, less estimated residual value of each asset, over the life of the primary lease. The standard rates of depreciation are as follows:




Freehold buildings

50 years

Leasehold land and buildings - lease longer than 50 years

50 years

Leasehold land and buildings - lease shorter than 50 years

Lease period

Motor vehicles; fixtures and fittings; equipment


5 years

Computer hardware

3 years

Fixed assets are subject to review for impairment when there is an indication of a reduction in their carrying value. Any impairment is recognised in the SOFA in the year in which it occurs.



1.8 Investments


Listed investments are stated at mid-market value at the balance sheet date.
Investment properties are stated at market value as advised by RNIB's property advisors at the balance sheet date and this is done on an annual basis.
The investment in subsidiary undertakings is at cost.
The SOFA includes the net gains and losses arising on disposals and revaluations throughout the year.

1.9 Stocks


Stock of finished goods held for resale is valued at the lower of cost and net realisable value. Cost is standard cost on a first-in first-out basis. Finished goods for resale comprises products suitable for use by blind and partially sighted people, Christmas cards and gifts.

1.10 Pension scheme

For the defined benefit pension schemes of the RNIB group, the current service costs, gains and losses on settlements and curtailments, are charged to resources expended. Similarly, pension finance costs arising from changes in the net of the interest costs and expected return on assets are charged to resources expended. Where income arises as a result of such changes this is shown in the statement of financial activities as an “other” incoming resource. Actuarial gains and losses are recognised immediately in the statement of financial activities as “Actuarial gain, or loss, on Defined benefit pension scheme”. For the defined contribution schemes of the RNIB group the amount charged to the SOFA in respect of pension costs and other post-retirement benefits are the contributions payable in the year. The Group and Charity defined benefit pension scheme liability/asset is shown on the face of the Balance Sheet.


1.11 Leased assets


RNIB has entered into finance leases for talking book players with a view to improving and increasing the RNIB Talking Book Service for people with sight problems. Leases are regarded as finance leases where their terms transfer to the lessee substantially all of the benefits and burdens of ownership other than the right to legal title.

The obligations to the lessor are shown as part of the borrowings and the rights in the corresponding assets are treated in the same way as owned fixed assets.



All operating leases and rental expenses are charged to the SOFA as incurred over the term of the lease on a straight line basis.

1.12 Taxation


RNIB is a registered charity, and as such is entitled to certain tax exemptions on income and profit from investments and surpluses on any trading activities carried out in furtherance of the Charity's primary objectives, if these profits are applied solely for charitable purposes.




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