Under the ‘Statement of Recommended Practice’ (FRS 15) all social landlords must ensure their financial statements are compliant with component accounting ruling by 31 March 2012. Are you ready for this change?
Take the Component Accounting live software demonstration
In case you don’t yet know, the new rule requires housing associations to report the value of their stock against their component parts. So, rather than the value of each of your properties being calculated as a single asset, you will have to base your calculations on between 7-10 components (e.g. roof, doors, boiler, etc) of the property to make up the overall value. In addition, each of these components will also need to carry the depreciation values associated.
Consider an organisation that currently has 10,000 properties. Previously each property would have been reported on its overall value. Now, the new legislation requires each of the 10,000 properties to be reported and analysed against its component parts, resulting in a requirement to capture financial details of between 70 – 100,000 components.
The financial reporting required by this legislation will see a vast increase in the volume of data which will need to be captured, analysed and maintained by your organisation.
It’s a significant challenge and Capita can help
To meet the requirements of FRS15, Capita has developed our Housing Component Accounting application.
This calculates the depreciation on property assets, either in conjunction with the existing Stock Condition module or by extracting information from third-party asset management systems. This is with the express purpose of calculating asset depreciation, disposal and impairment journals.
Make sure you’re ready in time
Download a fact sheet to find out how the Component Accounting application can benefit your social housing organisation.
Capita’s housing strategy director, Martyn Rees’s, has published top tips on getting ready in time for the component accounting legislation. The was recently published in Housing Association & Building Maintenance and you can read it here. This article appears with the kind permission of Hamerville Magazines and they retain full copyright.