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56 City of Glasgow College Annual Report & Accounts 2019-20

CITY OF GLASGOW COLLEGE

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 12 MONTHS ENDED 31 JULY 2020

Maintenance of Premises

Tangible Fixed Assets

a. Land and buildings

Where land and buildings are funded by government grants, the grants are recognised as income

over the period in which the College recognises the related costs for which the grant is intended

to compensate. Where part of a government grant is deferred it is recognised as deferred income

with creditors and allocated between creditors due within one year and due after more than one

year as appropriate.

Freehold land is not depreciated. Freehold buildings are depreciated over their expected useful

economic life to the College of between 20 and 125 years, as identified by the valuer, except

where the valuer has identified that they should be depreciated over a useful economic life

equivalent to the remaining life of the whole building. Building improvements are depreciated

over a useful economic life equivalent to the remaining life of the whole building.

The cost of planned and routine corrective maintenance of the College estate is charged to the

Statement of Comprehensive Income as incurred.

The College's land & buildings are valued on the most appropriate basis depending on their

planned future use. The basis of valuation was Depreciated Replacement Cost for the City,

Riverside and Townhead buildings as these sites are not planned to be sold. The land at Allan

Glen's and St David's has been valued on an existing use valuation basis. The buildings which

the College intends to sell have all been valued at open market value. Where the College has

undertaken specific capital improvement works on its buildings exceeding £10,000, these have

been added to Land and depreciated over a useful economic life equivalent to the remaining life

of the whole building. These works are included within the periodic valuations obtained by the

College.

Finance costs which are directly attributable to the construction of land and buildings are not

capitalised as part of the cost of those assets.

Buildings under construction are accounted for at cost, based on the value of architect's

certificates and other direct costs incurred to the year end.

A review for impairment of a fixed asset is carried out if events or changes in circumstances

indicate that the carrying amount of the fixed asset may not be recoverable. In the event an

impairment adjustment is required the College would recalculate the useful economic life of the

asset, charge accelerated depreciation and deferred grant to the Statement of Comprehensive

Income.

Where land and buildings are acquired with the aid of specific grants they are capitalised and

depreciated as above.

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