The Financial Reporting Team are running a major project which will result in changes to all financial reporting across the University, over the next 18 months. This will impact on the work of staff involved in processing and recording financial transactions and staff who rely on financial reports.
Why are these changes happening?
- The University currently prepares its accounts under the 2007 Statement of Recommended Practice (SORP) which is framed by UK accounting regulations known as Generally Accepted Accounting Practice (GAAP).
- From 1 January 2015 onwards UK GAAP is being replaced by a new ‘Financial Reporting Standard’ (FRS102), which aims to bring UK accounting regulations more in-line with those applied internationally.
- In response to FRS102, a new SORP has been produced and the University will be required to produce its first full set of accounts under these new regulations for the year ended 31 July 2016. However, this will require the previous year’s numbers to be restated and so the University must retrospectively apply the new regulations to its 2014/15 results.
What does this mean?
- There will be significant changes to the way the University accounts for many items, including the following:-
- Grants and endowments
- Leases and contracts
- Fixed assets
- Employee benefits
- In the most part this will only mean changes to how such items appear on both the accounts at year-end and at month-end but in some cases there may be the need to alter systems to accommodate new calculations required under the new rules.
- The format of monthly budget statements will need to change in line with these new requirements from August 2015 onwards.
Where are we with the project?
- We are currently in the process of reviewing the effects on the 2014/15 accounts and developing processes to put in place to ensure that we are following the regulations correctly before the start of the next financial year (which will be the first to be fully prepared under FRS102).
- Once the impacts are known and new processes developed we will be addressing those who are directly affected by the changes through presentations and any necessary training. This will take place in June 2015.
- We will be reviewing the monthly budget statements for any necessary changes in the near future and will communicate these to you as soon as they are confirmed.
- We have put together a ‘project board’ in order to communicate the changes to the wider university and to help identify any potential unforeseen issues with implementation. The first meeting of this board is to take place in the very near future.
How can you help?
- This article is mainly designed to raise awareness amongst those who produce and make use of the University’s accounts.
- If you have any contracts, grants, donations or leases which are not accounted for centrally (i.e. managed by Estates, KIE, Research Services, Development Office or Finance) then please let us know as the correct accounting treatment for these may be changing.
Any Questions?
- A SharePoint [3] site has been created and contains a discussion board for any queries you may have.
- Alternatively, Richard Warnham (Project Accountant) will be happy to answer any queries or issues you may have with the changes. He can be reached on ext. 7976 or through email at R.Warnham@kent.ac.uk.