cathedrals accounting regulations

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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.

Date issued: 10 February 2014 2



CONTENTS

Re.!'ation# Pa.e

( Introd!ction

1.1 Statement by the Church Commissioners 6

1.2 re!ace "

1.# $he regulations% a true and !air vie& and the relationshi'

&ith other 'ronouncements (

1.4 )ey to abbreviations used *

% Genera'

2.1 +ateriality 10

2.2 Content and 'ur'oses o! the re'ort and accounts 're'ared

under these regulations 10

2.# ,sers o! the re'ort and accounts 10

2.4 Summary accounts 11

2.- Com'arative !igures 11

2.6 Funds 11

2." Audit 11

2.( A''roval 12

2.* ublication 12

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

#.1 eneral 1#

#.2 Aggregation into a cathedral/s entity only accounts 1#

#.# Consolidation 1#

#.4 $ests !or aggregation and consolidation 1#

Date issued: 10 February 2014 #



#.- Control 14

#.6 +ethods o! accounting !or entities controlled by the Cha'ter 14

Pa.e

#." oncoterminous year ends o! entities included in a cathedral/s

consolidated accounts 16

#.( ntities not controlled by the cathedral 1"

#.* Su''lementary in!ormation 1"

#.10 Choir school 1(

1 Ann!a' Report

4.1 eneral 1*

4.2 3egal and administrative in!ormation 1*

4.# Structure% governance and management 1*

4.4 b5ectives 21

4.- Activities% achievements and 'er!ormance 21

4.6 Financial revie& 22

4." lans !or !uture 'eriods 24

4 For+at o$ Acco!nt#

-.1 eneral 2-

-.2 Accounting 'olicies to be disclosed 2-

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

6.1 rinci'les 26

6.2 Format o! consolidated SFA and &ored e7am'le #0

6.# SFA: 7'lanation o! &hat to include under individual items #2

& 7a'ance #heet

".1 eneral #*




".2 $he cathedral% its ancillary buildings and the inventory #*

".# ro'erty 40

Pa.e

".4 De'reciation o! 'ro'erties used !or cathedral 'ur'oses 41

".- 8nvestments 42

".6 lant% machinery% vehicles% o!!ice e9ui'ment% com'uters%

!urniture and !ittings 42

"." +ovements on !i7ed assets 42

".( Stoc 42

".* orro&ings 42

".10 Debtors and creditors 4#

".11 ;ored e7am'le o! consolidated balance sheet 44

".12 ;ored e7am'le o! selected notes to the accounts 4-

8 Ca#h $'o" #tate+ent

(.1 eneral 4(

(.2 ;ored e7am'le o! consolidated cash !lo& statement 4(

(.# ;ored e7am'le o! cash !lo& notes4*

) Note di#c'o#!re#

*.1 Funds -0

*.2 Sta!! numbers -0

*.# Sta!! costs -0

*.4 moluments o! higher 'aid sta!! -0

*.- ensions -1

*.6 <elated 'arty disclosures -1

*." <emuneration o! members o! the Cha'ter -2

*.( 7'enses o! members o! the Cha'ter -#

Date issued: 10 February 2014 -



*.* Auditors/ remuneration -#

Pa.e

*.10 uarantees -#

*.11 Commitments -4

*.12 Consolidated entities -4

(, S!++ary acco!nt# --

(( G'o##ary -6

Appendice#

( $he !unds o! a cathedral -*

% Care o! Cathedrals +easure 1**0 62

1 A''lication o! accounting standards to cathedral accounts 64

9 F<S 1" and 'ension schemes managed by

$he Church o! ngland ensions oard ""

4 ;oring 'arty on revie& o! cathedral accounting "*




( INTRODUCTION

(:( State+ent by the Ch!rch Co++i##ioner#

;ith the su''ort o! the Cathedrals Administration and Finance Association and theAssociation o! nglish 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 ovember

2006 Accounting and <e'orting <egulations !or nglish 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

noncom'liance.

$hese re9uirements a''ly to all !inancial years commencing on or a!ter 1 December

2006. arlier ado'tion is% ho&ever% encouraged.

Date issued: 10 February 2014 "



(:% Pre$ace

1.2.1 8n August 1**6 the Association o! nglish Cathedrals =AC> 'ublished uidelines on

nglish Anglican Cathedral Accounts. At the re9uest o! the AC 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.

1.2.2 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 $as Force and the revised Statement o! <ecommended ractice

?Accounting and <e'orting by Charities@ issued by the Charity Commission in

ctober 2000. $he ovember 2006 <egulations have been s'eci!ied !ollo&ing a!urther revie& o! the guidelines% taing into account the re9uirements o! the Charities

S< 200-.

1.2.# 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

S<> 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 Commissionsregulatory !rame&or% are charities and that there!ore the regulations should accord

&ith the Charities S< &herever relevant. $he relationshi' &ith the Charities

S< 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 S<. 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.

1.2.4 8n res'ect o! any cor'orate 'ro'erty held !or nonecclesiastical 'ur'oses =!or e7am'le%

schools>% Cha'ters may be &ithin the Charity Commissions regulatory !rame&or.8n res'ect o! registered charities o! &hich they are trustees% Cha'ters are &ithin the

Charity Commissions regulatory !rame&or.

Date issued: 10 February 2014 (



(:1 The Re.!'ation#; a tr!e and $air *ie" and the re'ation#hip "ith other

prono!nce+ent#

1.#.1 $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

AC% the Church Commissioners have s'eci!ied the !orm o! accounts to be used.

1.#.2 $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 S<sin 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.

1.#.# 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%

SSAs and ,8$F abstracts.

1.#.4 $he regulations detail the a''lication o! the Charities S< to cathedral accounts andalso 'rovide !or certain additional disclosures relevant in the conte7t o! cathedral

accounting. $he Charity Commission recognises that the recommendations o! the

S< 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***.

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 S<

may be re9uired% 'articularly &here cathedrals have activities or 'ro'erty !or &hich

the accounting treatment &ill be more !ully described in the S<. 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.

1.#.6 $hroughout these regulations% the &ord Bshould indicates% as it does in the Charities

S< 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.

Date issued: 10 February 2014 *



(:9 <ey to Abbre*iation# !#ed

AC Association o! nglish Cathedrals

AS Accounting Standards oard

CAFA Cathedrals Administration and Finance Association

F<S Financial <e'orting Standard

SFA Statement o! Financial Activities

S< Statement o! <ecommended ractice

SSA Statement o! Standard Accounting ractice

,8$F ,rgent 8ssues $as Force




% GENERAL

%:( Materia'ity

$he 'rovisions o! these regulations should only be a''lied to items and entitiesmaterial in the conte7t o! the cathedrals o'erations. $his should be borne in mind at

all times in reading and a''lying these regulations.

%:% Content and p!rpo#e# o$ the report and acco!nt# prepared !nder the#e

re.!'ation#

2.2.1 $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 =SFA>

• Consolidated balance sheet

• ntity only balance sheet

• Cash !lo& statement% i! re9uired by F<S 1

• Accounting 'olicies• otes to the accounts.

2.2.# Cash !lo& statements are% !or many cathedrals% unliely to di!!er materially !rom the

SFA and !or this reason are% unless re9uired by F<S 1 on account o! the sie 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 mae

com'arisons bet&een cathedrals or to in!orm decisions on the allocation o! grants

bet&een them =e.g. nglish eritage% the Church Commissioners>.

%:1 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




• the Church Commissioners

• the Association o! nglish Cathedrals

• diocesan bodies

• !und 'roviders

• other cathedrals• grant 'roviders and lenders o! !unds

• the general 'ublic

%:9 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 SFA% 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 SFA 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.

%:- F!nd#

2.6.1 Funds should be analysed in the SFA 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 lined to a total

summary. $he Cha'ter should decide on the most suitable !orm o! 'resentation.

2.6.2 A''endi7 1 e7'lains the legal 'osition relating to these !unds.

%:& A!dit

2.".1 $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.

2.".2 $he auditors terms o! engagement should be agreed in &riting &ith the Cha'ter o!

the cathedral% at least every three years.




2.".# $he audit should be conducted in accordance &ith ractice ote 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.

2.".4 $he auditor &ill 'roduce a management letter addressed to the Cha'ter at the

conclusion o! each years audit or the con!irmation that none is re9uired. $his should

be 'resented to a meeting o! Cha'ter.

%:8 Appro*a'

2.(.1 $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.

2.(.2 $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.

Date issued: 10 February 2014 1#



# ENTITIES TO 7E INCLUDED IN A CATHEDRAL3S

CONSOLIDATED ACCOUNTS

1:( 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 alsoconnected 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 taen 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 noncharitable

trading entities% and charitable entities% &hich bene!it the cathedral/s ministry and are

controlled by the Cha'ter should be consolidated on a linebyline 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 line

byline basis.

1:9 Te#t# $or a..re.ation and con#o'idation

#.4.1 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. o&ever% in!ormation




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:

• Does the Cha'ter control the entity

• $o &hat e7tent is the entity !or the bene!it o! the cathedral/s ministry

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 &itha 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.

Control may be e7ercised directly or indirectly by the Cha'ter acting through otherindividuals or entities &ho are under the control o! the Cha'ter and &ho in turn

control the connected entity.

1:- Method# o$ acco!ntin. $or entitie# contro''ed by the Chapter

#.6.1 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 andtourists% 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.

ther entities should be consolidated.

#.6.2 Partia''y $or the bene$it o$ the cathedra'3# +ini#try

Gartially !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 liely to arise in t&o circumstances:

Date issued: 10 February 2014 1-



• &here the Cha'ter is trustee o! a trust set u' to bene!it the cathedral and a

noncathedral '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''eals'eci!ying the allocation o! income =and o! assets in the event o! &inding

u'> and is there!ore unliely 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 S<. 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 S<.

• &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

Gene!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 ob5ectiveso! 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. =Gene!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% connectedentities should be as !ollo&s:




Le*e' o$ bene$it

to the cathedra'3# +ini#tryContro''ed by the Chapter=

>e# No

;hole

artial

Discretionary

one

A or C J 3

J 3

, =C J 3>

3

8 J S J 3

8 J S J 3

8 J 3

A K Aggregate =a''licable to s'ecial trusts>

C K Consolidate

K ross e9uity account =a''licable to trusts &ith s'eci!ic distribution 'rovisions>

8 K 8nclude only income receivable

3 K 3ist in the notes to the cathedral/s accounts

S K rovide su''lementary in!ormation

, K ,nliely to occur because o! 'otential con!licts o! interest. 8! it does occur% then

consolidate and list.

#.6.6 ?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 SFA% 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 S<.

#.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. $hecathedral should use the net e9uity method =as de!ined in F<S *> to disclose% in the

consolidated SFA% its share o! the associates net o'erating 'ro!it or loss and o! any

other gains or losses and% in the consolidated balance sheet% its share o! the associates

net assets. $his method is described in 'aragra'h 41# o! the Charities S<

1:& Noncoter+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 cathedrals

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

Date issued: 10 February 2014 1"



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'

nly 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:) S!pp'e+entary in$or+ation

#.*.1 Connected entities should be listed in the notes to the cathedral/s consolidatedaccounts. 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! noncontrolled entities% only income receivable !or the year is to beincluded 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 longerterm 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 noncontrolled 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.

Date issued: 10 February 2014 1(



1:(, Choir #choo'

#.10.1 ach 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 =unliely 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 beconsolidated 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 ".#.">.

Date issued: 10 February 2014 1*



9 THE ANNUAL REPORT

9:( Genera'

$he cathedral/s annual re'ort should be 'roduced in a !ormat a''ro'riate to thecathedral 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 mae

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 baners% solicitors%

accountants% stocbroers% 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 Str!ct!re; .o*ernance and +ana.e+ent

4.#.1 $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




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 coo'erates in the 'ursuit o! its ob5ectives

•

Details o! the method o! a''ointing members o! Cha'ter indicating &ho isentitled 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 riss to &hich the cathedral is

e7'osed have been revie&ed and that systems have been established to

mitigate those riss.

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

• maing 5udgements and estimates that are reasonable and 'rudent

• ee'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 taing 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 inany o! the !ollo&ing:




• 3and

• Funds administered !or the Central oard o! Finance o! the Church o!

ngland 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 Obecti*e#

$he re'ort should set out the cathedrals 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 Acti*itie#; achie*e+ent# and per$or+ance

4.-.1 $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 SFA under B<esources e7'ended

on mission 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'ee'

• ducation 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 e7tracathedral activities undertaen by

cathedral clergy and sta!!. $here should be no notional charge in the

accounts !or the time s'ent on e7tracathedral 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 &or o!

volunteers% it is nevertheless im'ortant !or readers to be su''lied &ith




su!!icient in!ormation to understand the role and contribution o!

volunteers.

4.-.2 rogress on achieving the main 'riorities should be re'orted% and 9uanti!ied i!

a''ro'riate.

4.-.# $his section should also include re'orts on the !ollo&ing% i! a''licable:

• $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 &ors to the !abric o! the cathedral.

9:- Financia' re*ie"

4.6.1 $he re'ort should contain a revie& o! the !inancial 'osition o! the cathedral and theother 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 taen on them

• 8nvestment 'olicy and 'er!ormance against that 'olicy and against

a''ro'riate benchmars

•8n res'ect o! investment 'ro'erty% an analysis o! rents receivable% ma5orcategories o! e7'enditure and gains or losses on dis'osals and revaluation

• 8n res'ect o! other investments% gross income !rom stoc 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! stoc 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 stoc maret 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




• 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>

4.6.# A !ive year summary o! ey !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 oneo!! items or !ollo& an e7ce'tional

year.

4.6.4 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 B,,,

ross rents receivable "-0

Service charge income 1-0

ross income !rom investment 'ro'erty *00

<ents 'ayable =->

<e'airs and maintenance =##>

ther 'ro'erty running costs =#->

Service charge e7'enditure =1-6>

Service charge liability =2>

Agents commission =">

Maluation !ees =14>

<ents &ritten o!! as irrecoverable =2>

3egal e7'enses =2>

De'reciation and amortisation =1>

$otal 'ro'erty management and rental collection costs =2-">

et income !rom investment 'ro'erty 64#

3osses on revaluations and dis'osals o! investment 'ro'erties =#6#>

$otal return on investment 'ro'erty 2(0

% Tota' ret!rn on other in*e#t+ent# E!itie# Fiedintere#t

@ariab'eintere#t

Tota'

B,,, B,,, B,,, B,,,

ross income !rom other investments

3isted in the ,) (0 4- 12-

3isted overseas - 20 2-

,nlisted - -

Cash de'osits - 4 *

*0 "0 4 164

8nvestment management costs =4> =1> =->

3osses on revaluations and dis'osals o!

investments =224> =2-> =24*>




$otal return on other investments =1#(> 44 4 =*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

longerterm 'lans !or !uture years should be given.




4 ACCOUNTS FORMAT

4:( Genera'

Sources and a''lications o! !unds% assets and liabilities and cash !lo& should besho&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 accountingstandards. 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. 7am'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 SFA

• $he a''ortionment o! su''ort costs% including any estimation techni9ues.




- STATEMENT OF FINANCIAL ACTI@ITIES 5SOFA6

-:( Princip'e#

Genera'

6.1.1 $he consolidated SFA 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 SFA 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 SFA 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 SFA. 8t &ill be trans!erred to the SFA in the year in

&hich the conditions are satis!ied. 8! material% details o! its recei't should bedisclosed 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 recognied 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

SFA% 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 SFA 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>.




• Gi$t Aid and reco*erab'e inco+e ta

$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 interestreceivable 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 SFA.

• 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 SFA 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 SFA

• ;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 SFA.

;hether or not the bene!it is 9uanti!iable and included in the accounts% it should be

acno&ledged and described in the annual re'ort =see 'aragra'h 4.6.2>.

• Gi$t# in ind

;here investments% 'ro'erty or other assets are donated to the cathedral% or are sold to

it at less than maret value% then the di!!erence bet&een the maret value and the cost

to the cathedral% i! any% should be sho&n as income in the SFA% in the column=s> !or

the !und=s> to &hich the gi!t &as made. 8! it is not 'racticable to estimate a maret

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 tae into

account any re9uests !or anonymity by the donor and any need !or con!identiality.




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 SFA and identi!ied to the

a''ro'riate !und.

6.1.# Co#t# o$ .eneratin. $!nd#

7'enditure incurred in order to earn income should not be netted o!! that income but

should be sho&n under Gcosts o! generating !undsG. 7am'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 ascosts o! generating !unds.

6.1.4 Re#o!rce# epended

• 7!i'din. repair#; re#toration and +aintenance

nly e7'enditure actually incurred on re'airs% restoration and maintenance should be

charged to the SFA. Any amount retained !or !uture e7'enditure should be carried

!or&ard as 'art o! the unrestricted or designated !unds as a''ro'riate.

7'enditure on re'airs% restoration and maintenance% including direct labour% should be allocated to the a''ro'riate heading in the SFA:

• 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'ee'

• ducation =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 tae '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 SFA. 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'ee'% 'hotoco'ying and




stationery could be allocated according to the number o! !ulltimee9uivalent 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 Su''ort costs $otal

Costs o! generating

!unds

+inistry

Cathedral and

'recincts u'ee'

ducation and

outreach

Community% 'arishand congregation

Cathedral building

additions

Statutory inventory

additions

ther e7'enditure

on mission

overnance costs

$$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

8n accordance &ith SSA - any irrecoverable MA$ should be included in thee7'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.

Date issued: 10 February 2014 #0



-:% For+at o$ Con#o'idated State+ent o$ Financia' Acti*itie#

$he SFA should be analysed in columns bet&een:

• ,nrestricted !unds

• <estricted !unds

• ndo&ment !unds

• $otal.

A''endi7 1 e7'lains ho& to account !or !unds. 3ie the Charities S<% the

regulations do not re9uire designated !unds to be se'arated !rom unrestricted !unds on

the !ace o! the SFA. o&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 SFA bet&een

unrestricted !unds and restricted !unds.




0ored ea+p'e o$ SOFA

Unre#tricted

F!nd#

Re#tricted

F!nd#

Endo"+ent

F!nd#

Tota'

F!nd#

$otal

Funds

%,,- 200-

otes B,,, B,,, B,,, B,,, N000

Inco+in. re#o!rce# 1

Moluntary income (6 44 20 1-0 1-2

rants receivable *6 100 1*6 (6

Charges and !ees arising in the course o!

mission -6 -6 62

8ncome !rom activities generating !unds 1%1"6 1%1"6 ((6

8ncome !rom investments *1* 1#6 1%0-- 1%22#

ther incoming resources 6 6 40

Tota' inco+in. re#o!rce# %;(8( 118 (%, %;-1) 2%44*

Co#t# o$ .eneratin. $!nd# 2 1%1** - 0 1%204 1%1-0

Net inco+in. re#o!rce# a*ai'ab'e $or

+i##ion )8% 111 (%, (;914 1%2**

Re#o!rce# epended on +i##ion #

+inistry 4#0 1*# * 6#2 -"4

Cathedral and 'recincts u'ee' 606 #2 6#( 1%"2(

ducation and outreach 11- 4( 16# 161

Community% 'arish and congregation - 1 6

Cathedral building additions

Statutory inventory additions 4

21

100

100

21

ther e7'enditure on mission 20 20 40Tota' re#o!rce# epended on +i##ion (;(&- %)4 (,) (;48, 2%-0#

Go*ernance co#t# 6- 6- 60

Total expenditure on generating funds,

mission and governance 2,440 300 109 2,849 3,713

Net inco+in. 5o!t.oin.6 re#o!rce# 5%4)6 18 (( 5%(,6 =1%264>

Other reco.ni#ed .ain# 5'o##e#6

8nvestment 'ro'erty - =-00> =-00> #-0

8nvestments 6 =4"> =6#> =1> =111> *6 on investment 'ro'erty " 2 ( 10 11

Actuarial gains =losses> on de!ined bene!it

'ension schemes (

=4-> =6#> =4*#> =601> 4-"

Gro## tran#$er# bet"een $!nd# * =-#> 1# 40

Net +o*e+ent in $!nd# 514&6 5(%6 599%6 58((6 =(0">

$otal !unds brought !or&ard 1%46( 1%(0# 1#%21- 16%4(6 1"%2*#

reviously ca'italised assets 10 =4-> =4->

Tota' $!nd# carried $or"ard (;((( (;&9- (%;&&1 (4;-1, 16%4(6




-:1 SOFA Ep'anation o$ "hat to inc'!de !nder indi*id!a' ite+#

6.#.1 $he SFA must be a com'rehensive account o! all resources receivable and 'ayable

by the cathedral during the year. o amount may be credited or debited directly to

any !und &ithout 'assing through the SFA. nly ca'ital e7'enditure =i.e.

e7'enditure to create a !i7ed asset recognised in the balance sheet> should not a''ear

in the SFA.

6.#.2 $he items in this section are listed in the order in &hich they a''ear in the SFA.

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 SFA or

in the notes to the accounts &ith clearly identi!iable totals carried to the SFA. $he

notes should normally include all the ca'tions listed in this section 6.#.

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.

• Ta 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 ntitlement: the cathedral is certain o! its entitlement to the item o!

income and any 'reconditions have been com'lied &ith.

o Certainty: it is reasonably certain that the item &ill be received &ithin a

measurable time s'an.

Date issued: 10 February 2014 ##



o +easurement: the amount to &hich the cathedral is entitled and &hich

&ill be received can be reliably measured.

8t is unliely that a residual be9uest &ould meet the measurement criterion.

$he amounts receivable should be allocated to the relevant !und columns in

the SFA 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 boos. o&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.




• 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!ectoryand other catering !acilities and any income received !rom other trading

activities% including &or 'er!ormed by the cathedral/s sta!!% e.g. masons%

stained glass artists% members o! the &ors sta!! =such as gardeners>% etc% !or

other bodies. Cathedrals may &ish to e7'and this and add !urther sub

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 hise7'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 #hortter+ 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.

• Other ite+#

6.#.4 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' +aretin. co#t#

Date issued: 10 February 2014 #-



7am'les are advertising cathedral !acilities and events in lea!lets and

magaines '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.

• In*e#t+ent +ana.e+ent co#t#

• S!pport co#t# =i! not allocated across above subheadings>

6.#.- Ependit!re on +i##ion

Mini#try

• C'er.y #tipend# and "orin. epen#e#

$his !igure should include clergy sti'ends% em'loyer/s national insurance and

'ension contributions% &oring 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'loyers 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'ee'.


• Cathedra' and precinct# !peep

•Maor repair# and re#toration




+a5or re'airs and restoration o! the !abric are &ors o!ten involving elements

o! conservation or re'lacement and are distinguishable !rom routine

maintenance by the sie o! the &or 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 !peep

Costs o! routine re'airs to and maintenance o! the cathedral !abric including

'ro!essional !ees% 'remises management costs% materials etc. Costs o! u'ee'

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# !peep

$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 &al&ays% signs% notices% trees%

etc.

• S!pport co#t#

Sta!! and other costs associated &ith cathedral u'ee'% 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. ducation costs o!

choristers should be included &ith the cost o! services and music under

ministry. o 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.


• Co++!nity; pari#h and con.re.ation

Date issued: 10 February 2014 #"



7'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

&or% 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#


• Stat!tory in*entory addition#


• Other ependit!re on +i##ion

• Intere#t and #i+i'ar char.e# payab'e

All interest% commission and !ees 'ayable on loans% ban overdra!ts and other

borro&ings and ban charges.

• Lo##e# on di#po#a' o$ operatin. a##et#$hese are !i7ed assets other than 'ro'erty and investments.

• Other ite+#


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>

Date issued: 10 February 2014 #(



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 SFA 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 &rite

o!! 'reviously ca'italised additions to their cathedral buildings or statutory

inventory =see 'aragra'h ".2.6>.

Date issued: 10 February 2014 #*



& 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 S< 'rovides that heritage assets may be e7cluded !rom the balance sheet &here:

• reliable cost in!ormation is not available and conventional valuationa''roaches lac 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 liely 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. o&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 ris 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 ind =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




heritage assets% &hich are e7cluded !rom the balance sheet ='aragra'hs ".2.1 and

".2.2>% should be &ritteno!! in the SFA% a!ter total !unds brought !or&ard.

&:1 Property

".#.1 n the !ace o! the balance sheet 'ro'erties should be classi!ied under the !ollo&ing

headings:

• 8nvestment 'ro'erties

• ther 'ro'erties

".#.2 ther '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 besubclassi!ied in the notes to the accounts bet&een

• !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.

".#.4 $he basis o! valuation used in the accounts should be as !ollo&s:

• 8nvestment 'ro'erties should be included in the balance sheet at maret

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 maret% at de'reciated re'lacement cost in accordance

&ith F<S 1-

• 8! 'ro'erties are occu'ied by individuals &ho have the right o! occu'ation

then this should be taen 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 maretvalue carried out by inde'endent 'ro!essional advisors or a''ro'riately 9uali!ied




members o! sta!! or advisory committees. Such a 'erson &ould base their valuation

on !actors such as no&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 maret value in

accordance &ith SSA 1*. 8n other cases% the buildings should be classi!ied in the

note on noninvestment '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 ran as investment 'ro'erties% see 'aragra'h ".#.".

".4.2 De'reciation should be calculated by re!erence to une7'ired lives and estimatedresidual 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.

".4.# $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:

• A 'olicy and 'ractice o! regular maintenance

• A 'ro'erty unliely 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.

".4.4 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 thedi!!erent 'arts should be valued and de'reciated se'arately.




&:4 In*e#t+ent#

".-.1 9uity shares and bonds should be carried at maret value. 8! investments are material

then% in order to give an indication o! the degree and nature o! ris 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 stoc e7change in the ,)% overseas% or

unlisted. ;here values o! material investments are determined other than by

re!erence to readily available maret '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.

".-.2 Any investments in nonconsolidated connected entities should be valued on the

e9uity method =i.e. at the cathedral/s share o! the underlying net assets> and the

cathedrals share o! the 'ro!its o! such entities should be credited to the SFA under a

se'arate heading. Details o! such investments should be 'rovided in the notes.

&:- P'ant; +achinery; *ehic'e#; o$$ice e!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.

&:& Mo*e+ent# on $ied a##et#

A reconciliation should be 'rovided in the notes bet&een the !igures !or each o! thema5or 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 Stoc

Stoc should be carried at the lo&er o! cost and net realisable value. A descri'tion o!

items included in stoc should be 'rovided in the notes to the accounts. 8t is unliely

that stocs 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.




&:(% 0ored ea+p'e o$ #e'ected Note# to the Acco!nt#

Unre#tricted

F!nd#

Re#tricted

F!nd#

Endo"+ent

F!nd#

$otal

Funds

2006

B,,, B,,, B,,, N0009 Net in*entory tran#action#

rants !or ac9uisitions 10 10

Cash donations !or ac9uisitions - -

Donations o! assets 4 4

roceeds o! dis'osals 2 2

Ac9uisitions =21> =21>

et transactions

4 In*e#t+ent property

At valuation 1 Oanuary 11%-00 11%-00

et =decrease> increase on revaluation =-00> =-00>

At valuation #1 December 11%000 11%000

All investment 'ro'erties are !reehold.

- In*e#t+ent#

8nvestments at maret value 1 Oanuary "6( 1%-6" - 2%#40

Additions 20 20

roceeds !rom dis'osals =16-> 0 =1-> =1(0>

et =decrease> increase on dis'osals and revaluation =4"> =6#> =1> =111>

8nvestments at maret value #1 December --6 1%-04 * 2%06*Short term de'osits 2#- 2#-

Cash " 2- #2

--6 1%"46 #4 2%##6

& Non in*e#t+ent property

At valuation 1 Oanuary 4#0 1%"26 2%1-6

Additions 1- 1-

De'reciation =2> =*> =11>

et increase on revaluation 2 ( 10

At valuation #1 December 4#0 1%"40 2%1"0




on investment 'ro'erties are held and used as

!ollo&s:

Freehold

3eased

&ith more

than -0

years to run

3eased &ith

less than -0

years to run $otal

N000 N000 N000 N000At 1 Oanuary

!or cathedral clergy and sta!! housing -40 *1 6#1

!or the education centre 1%0*- 1%0*-

!or cathedral trading activities ##0 100 4#0

1%42- -40 1*1 2%1-6

At #1 December

!or cathedral clergy and sta!! housing -40 *0 6#0

!or the education centre 1%110 1%110

!or cathedral trading activities ##0 100 4#0

1%440 -40 1*0 2%1"0

Unre#tricted

F!nd#

Re#tricted

F!nd#

Endo"+ent

F!nd#

$otal

Funds

2006

B,,, B,,, B,,, N000

8 Act!aria' .ain# 5'o##e#6 on de$ined bene$it

pen#ion #che+e#

At valuation 1 Oanuary 20 20

Actuarial gains =losses>

At valuation #1 December 20 20

(( E!ip+ent and p'ant

Cost -4 -4

De'reciation =#0> =#0>

et boo value at 1 Oanuary 24 24

Additions 40 40

roceeds !rom dis'osals 0

De'reciation !or year =(> =(>

3osses on dis'osals 0 0

et boo value at #1 December -6 -6

Cost *4 *4De'reciation =#(> =#(>

et boo value at #1 December -6 -6

(% Debtor# d!e "ithin one year

$rade debtors 2(0 2(0

Due !rom connected entities 1- 1-

ther debtors - -

re'ayments and accrued income 2" 2"

#2" #2"




8 CASH FLO0 STATEMENT

8:( Genera'

(.1.1 8! a cash !lo& statement is 'resented it should !ollo& the re9uirements o! F<S1% CashFlo& 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. n 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:% 0ored ea+p'e o$ Con#o'idated Ca#h F'o" State+ent

%,,- 200-

otes B,,, B,,, N000 N000

Net ca#h o!t$'o" $ro+ operatin. acti*itie# 14 =*#2> =2%0-(>

Ret!rn# on in*e#t+ent#

<ents received net o! costs 64# "66

8nterest and dividends received net o! costs 1-0 1*1

"*# *-"

Capita' ependit!re and $inancia' in*e#t+enturchases o! investments =20>

Sales o! investments 1(0 1-6

Additions to non investment 'ro'erty =1->

urchases o! e9ui'ment and 'lant =40> =4>

Sales o! e9ui'ment and 'lant 2

10- 1-4

Ca#h o!t$'o" be$ore +ana.e+ent o$ 'i!id

re#o!rce# and $inancin.

=#4> =*4">

Mana.e+ent o$ 'i!id re#o!rce#

et =increase> decrease in short term de'osits 1- =200> 1%04*

Financin.

e& endo&ments received 20

Decrease in loans 1- =1> =1>

8ncrease in overdra!t 1- 66

(- =1>

5Decrea#e6 increa#e in ca#h 1- =14*> 101




8:1 0ored ea+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#

%,,- 200-

B,,, N000 et outgoing resources be!ore revaluations and dis'osals

o! 'ro'erty and investments =210> =1%264>

3ess income added to endo&ment ca'ital =20>

3ess income !rom 'ro'erty and investments =1%0--> =1%22#>

Add 'ro'erty management costs% rental collection !ees and

investment management costs 262 266

Add de'reciation 1* 1*

Add losses on dis'osals o! e9ui'ment and 'lant 40

Decrease in stocs 4 0

8ncrease =decrease> in debtors =#2> (#

8ncrease in creditors 100 21

Net ca#h o!t$'o" $ro+ operatin. acti*itie# =*#2> =2%0-(>

(4 Reconci'iation o$ net ca#h $'o" to +o*e+ent in net $!nd#

%,,- 200-

B,,, N000

=Decrease> increase in cash in the year =14*> 101

Cash out!lo& !rom re'ayment o! loan 1 1

Cash in!lo& !rom increase in overdra!t =66>

Cash out!lo& =in!lo&> !rom increase =decrease> in short term

de'osits held as investment assets 21- =-00>

Cash in!lo& !rom decrease in short term de'osits held as currentassets =1-> =-4*>

Decrease in net !unds in the year =14> =*4">

et !unds at 1 Oanuary 2"0 1%21"

et !unds at #1 December 2-6 2"0

(- Ana'y#i# o$ chan.e# in net $!nd#

At 1

Oanuary

Cash !lo& At #1

December

Cash at ban and in hand held as current assets 20* =16#> 46

Cash held as investment assets 1( 14 #2an overdra!t =66> =66>

3oans due !or re'ayment a!ter one year =2> 1 =1>

Short term de'osits held as investment assets 20 21- 2#-

Short term de'osits held as current assets 2- =1-> 10

2"0 =14> 2-6

Date issued: 10 February 2014 -0



) NOTE DISCLOSURES

):( F!nd#

$he notes to the accounts should 'rovide in!ormation on the structure o! thecathedral/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!!

&oring !or the cathedral during the year. $he numbers should be divided bet&eena''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%

&oring !ull or 'art time !or an entity included in the cathedrals 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.

=moluments include sti'ends% !ees% &ages and salaries =ho&ever described and

including those 'aid by the Church Commissioners>% holiday and sic 'ay and the

value o! ta7able bene!its in ind but not em'loyers/ 'ension contributions.> 8! no one




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:

• em'loyers 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.

):4 Pen#ion#

*.-.1 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.

*.-.2 A''endi7 4 e7'lains ho& to re'ort on the 'ension schemes managed by the Church o!

ngland ensions oard.

):- Re'ated party di#c'o#!re#

*.6.1 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.

*.6.2 <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% taentogether% have a 'artici'ating interest

• Any controlled entity or 5oint venture or associated undertaing 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.




*.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

• utstanding 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 isnecessary !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.

*.6.- Some related 'arty transactions are such that they are unliely 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. 7am'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 alterthe 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 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'loyeesor 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 memberso! the Cha'ter include the clerical members and% !re9uently and &ith the

Date issued: 10 February 2014 -#



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 diocesanduties% 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

SFA and the note on total sta!! costs>. For diocesan clergy &hose duties

do not e7tend beyond Cha'ter business% the amounts involved are liely 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! ngland 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's 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 Epen#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 boo ee'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.




):(( 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.

Date issued: 10 February 2014 --



(, 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 !ormallya''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 SFA 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.

(,:1 $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 !ullannual 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&>.

(,:9 $he summary accounts should be accom'anied by a statement by the cathedral/s

auditors that they are consistent &ith the !ull audited accounts.

(,:4 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 SFA 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.




(( GLOSSAR>

((:( Anci''ary b!i'din.#

$he buildings attached to a Cathedral &ithin the red line% ie the boundary set out inthe relevant 'lan attached to the cclesiastical 7em'tion =3isted uildings and

Conservation Areas> rder 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

! '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 &ors% !rom &hich a''ro'riate deductions may then be madeto 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.

! 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 assets 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 unliely 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 butsuch 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 non

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 S< 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 andcannot dis'ose o! &ithout e7ternal consent% &hether 'rohibited by the Statutes% the

Date issued: 10 February 2014 -"



Cathedrals +easure% the donors &ishes or in some other &ay. ormally the asset

&ill belong to the cathedrals ?'ermanent endo&ment@% &here it is held on trusts

&hich contem'late its retention and continuing use but not its dis'osal. o&ever% in

the case o! a gi!tinind o! a ?&asting asset@% such as a building% a long lease or a

nondurable 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 &or and develo'ment have been

com'letedE and

• &hich is held !or its investment 'otential% any rental income being

negotiated at arms 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 cathedrals 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 misstatement 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 sie 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 taen into account are set out belo&. 8t &ill usually be a

combination o! these !actors% rather than any one in 'articular% that &ill determinemateriality:

Date issued: 10 February 2014 -(



• $he items sie 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 items 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 mae normal materiality considerations

irrelevant.

Date issued: 10 February 2014 -*



Appendi (

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! acathedral 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 cathedrals unrestricted !unds to be used !or 'articular

'ur'oses in the !uture. Such !unds are called Gdesignated !undsG. $he designation has anadministrative 'ur'ose only% and does not legally restrict the Cha'ters 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 no&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. o&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

taen by the assets received in e7change. G7changeG here may sim'ly mean a change o!




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.

• 7'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. nly &here the trusts o! the charity 'rovide to the contrary% or there areinsu!!icient !unds in the endo&ment to meet such costs% can they be charged against

the other !unds held by the charity.

o&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. ormally 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 no& &hich assets and liabilities are held in &hich !und.




Re#tricted Inco+e and Ependit!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 taen to s'end out o! a

'articular restricted income !und only &here the trusts so 'ermit. 7'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 taen 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>. o&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!.




Appendi %

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 mae '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. o &or

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! eitherthe 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 &or &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 no&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

taen to be any ob5ect o! intrinsic merit in these !ields% or any ob5ect &hich in some &ayelucidates or e7tends the current no&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% clocs and dials% monuments%

'aintings% &indo&s% tiles and ceramics =see A''endi7 1 to Advisory uidelines !or a

checlist 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 becon!used &ith the inventory re9uired by the +easure.




$he +easure is su''orted by detailed rules =Care o! Cathedrals <ules 1**0 =S8 1**0 o

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.




Appendi 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 =SSAs> 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 $as Force =,8$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 SSAs% F<Ss and ,8$F Abstracts% together &ith a brie!

indication o! their content and comments regarding the e7tent to &hich each document is

liely to be a''licable to cathedral accounts.




State+ent# o$ Standard Acco!ntin. Practice 5SSAP#6

SSAP# 0ithdra"n 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 !" 4 for cathedrals.

SSAP 4 Acco!ntin. $or *a'!e added ta

Follo&s the general 'rinci'le that the treatment o! MA$ in the accounts should re!lect anentity/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. o&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 ) Stoc# and 'on.ter+ contract#

ives guidance on the values to be included in the balance sheet o! stocs and longterm

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 maret value%

but &ithout charging de'reciation.





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.


SSAP %4 Se.+enta' reportin.

*ot applica$le to cathedrals.




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.


FRS % Acco!ntin. $or #!b#idiary !ndertain.#

Sets out the conditions under &hich an entity 9uali!ies as a 'arent undertaing &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.


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 shareholders 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-





FRS - Ac!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.


FRS & Fair *a'!e# in ac!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.


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.


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.


FRS (, Good"i'' and intan.ib'e a##et#

<e9uires 'urchased good&ill and intangible assets =&here maretable> to be ca'italised onthe balance sheet and amortised over their lives% normally regarded as 20 years% sub5ect to

im'airment revie&s.


FRS (( I+pair+ent o$ $ied 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




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.


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.


FRS (1 Deri*ati*e# and other $inancia' in#tr!+ent# di#c'o#!re#

S'eci!ies the disclosure !or !inancial instruments =such as s&a's% !or&ards% ca's and collarsand other derivatives> by !ocusing on the &ay in &hich they are used by the re'orting entity.


FRS (9 Earnin.# per #hare


FRS (4 Tan.ib'e $ied 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. o&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 e'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 7.2.

FRS (- C!rrent ta


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

Date issued: 10 February 2014 "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 onmission

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&. o#ever, the

standard does not cover the provision of voluntar& retirement $enefits, #hich are provided $&

some cathedrals. t 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

entitys '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

S<. ;here an entitys !inancial statements !all &ithin the sco'e o! a S<% the entity

should state the title o! the S< and &hether its !inancial statements have been 're'ared in

accordance &ith the S<s '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 S< 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 theob5ectives o!:

• relevance%

• reliability%

• com'arability% and

• understandability





FRS () De$erred ta

<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.

a& $e applica$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#


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!terthe 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

=nonad5usting events>. For e7am'le% a decline in maret value o! investments

bet&een the balance sheet date and the date &hen the !inancial statements areauthorised !or issue.


FRS%% 5IAS 116

Earnin.# per #hare


FRS%1 5IAS %(6 The E$$ect# o$ Chan.e# o$ Forei.n Echan.e Rate#

A cathedral may have transactions in !oreign currencies. $his standard 'rescribes ho&

cathedrals should include !oreign currency transactions.

ight $e applica$le to cathedrals.

FRS%9 5IAS %)6 Financia' Reportin. in Hyperin$'ationary econo+ie#





FRS%4 5IAS 1%6 Financia' In#tr!+ent# 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 entitys !inancial 'osition% 'er!ormance and cash

!lo&.

The disclosure reuirements appl& to cathedrals appl&ing - 25 onl&.

FRS%- 5IAS 1)6 Financia' In#tr!+ent# 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


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. $he F<SS is an o'tional standard% but entities ado'ting it are e7em't !roma''lying all the other accounting standards and ,8$F abstracts. From time to time% the AS

u'dates the F<SS to tae into account ne& accounting standards.

(nli)el& to $e of value to cathedrals.

Date issued: 10 February 2014 "#



Ur.ent I##!e# Ta# Force 5UITF6 Ab#tract#

UITF# 0ithdra"n 1% 2% #% 6% "% (% 10% 12% 1#% 14% 16 and 20

UITF Ab#tract 9 Pre#entation o$ 'on.ter+ 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.


UITF Ab#tract 4 Tran#$er# $ro+ c!rrent a##et# to $ied a##et#

!pplica$le to cathedrals $ut unli)el& to arise in practice.

UITF Ab#tract ) Acco!ntin. $or operation# in hyperin$'ationary econo+ie#

ill not $e applica$le to cathedrals.

UITF Ab#tract (( Capita' in#tr!+ent# i##!er ca'' option#


UITF Ab#tract (4 Di#c'o#!re o$ #!b#tantia' ac!i#ition#


UITF Ab#tract (& E+p'oyee #hare #che+e#


UITF Ab#tract (8 Pen#ion co#t# $o''o"in. the ())& ta chan.e# in re#pect o$ 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.


UITF Ab#tract () Ta 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


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 ( is to adopt the +uro.




UITF Ab#tract %% The ac!i#ition o$ a L'oyd3# b!#ine##


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.


UITF Ab#tract %9 Acco!ntin. $or #tart!p co#t#

Startu' costs should be accounted !or on a basis consistent &ith the accounting treatment o!

similar costs incurred in ongoing activities. Startu' costs that do not meet the criteria !orrecognition as assets under a relevant accounting standard should be &ritten o!! as incurred.

$hey should not be carried !or&ard as an asset.


UITF Ab#tract %4 Nationa' in#!rance contrib!tion# on #hare option .ain#


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 undertaen 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.


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.


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 maret rent &ill be 'ayable% on a straightline basis unless another systematic basis

is more re'resentative o! bene!it !lo&s.

Date issued: 10 February 2014 "-



UITF Ab#tract 14 Deathin#er*ice and incapacity bene$it#

$his Abstract clari!ies the accounting re9uired by F<S 1" B<etirement ene!its !or the cost

o! deathinservice 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 'eriods '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.


UITF Ab#tract 1- Contract# $or #a'e# o$ capacity


UITF Ab#tract 1& P!rcha#e and #a'e o$ o"n #hare#


UITF Ab#tract 18 Acco!ntin. $or ESOP Tr!#t#


Date issued: 10 February 2014 ""



Appendi 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! ngland

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 $he lay sta!! o! many cathedrals are members o! the Church ;orers ension Fund.$his !und has a de!ined bene!it section and a de!ined contribution section.

4 $hose cathedrals contributing to the Church o! ngland De!ined ene!its Scheme &ill

have to com'ly &ith F<S 1". $he Church o! ngland 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 ;orers ension Fund &ill need to see 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!icitcom'ared &ith the !air value o! the scheme assets

Date issued: 10 February 2014 "(



• an analysis o! the amounts !or each o! the com'onent 'arts o! the de!ined

bene!it costs charged or credited through the SFA

=Charities S< 200-% 'aragra'h 44->

Date issued: 10 February 2014 "*



Appendi 4

CATHEDRALS ADMINISTRATION AND FINANCE ASSOCIATIONACCOUNTS 0OR<ING GROUP

Me+ber# o$ the

"orin. .ro!p

Andre& ;ebster =Chairman> Director o! Develo'ment Canterbury Cathedral

8an urns Administrator Carlisle Cathedral

Caroline <obinson Cha'ter $reasurer Chelms!ord Cathedral

Christo'her Da&s Financial and De'uty

Secretary

Church Commissioners

erald Farmer $reasurer St Albans Cathedral

+ichelle Oohnson ead o! Finance Salisbury Cathedral

Sue )ing Administrator ;ae!ield Cathedral

Sue ace =Secretary> Chie! Accountant or +inster

Secretariat

Oan Da&son Church Commissioners

Oamie +il!ord Church Commissioners

Tai +ouden Church Commissioners

cathedrals accounting regulations

Documents