Page 52 - RFU Annual Report 2015/2016

Financial Statements
50

Notes to the Financial Statements continued

2. Accounting policies continued In the Group Cash Flow Statement, The defined benefit scheme is funded
cash and cash equivalents are with the assets of the scheme held
(q) Debtors shown net of bank overdrafts that separately from those of the Group, in
Short term debtors are measured at are repayable on demand and form separately administered funds. Pension
transaction price, less any impairment. an integral part of the Group’s cash scheme assets are measured at
Loans receivable, other than those to management. fair value.
clubs, are measured initially at fair
value, net of transaction costs, and are (t) Pension costs and other Fair value is based on market price
measured subsequently at amortised post-retirement benefits information and, in the case of quoted
cost using the effective interest The Rugby Football Union operates a securities, is the published bid price.
method, less any impairment. defined benefit scheme and a defined Liabilities are measured on an actuarial
contribution scheme. basis using the projected unit method
Loan notes not treated as public and discounted at a rate equivalent
benefit entity concessionary loans are Defined benefit pension scheme to the current rate of return on a high
initially recorded at the present value current service costs, past service costs, quality corporate bond of equivalent
of future payments discounted at a and gains and losses on settlements, currency and term to the scheme
market rate of interest for a similar are charged to the Profit and Loss liabilities. The actuarial valuations are
loan. Subsequently, they are measured Account immediately in the period in obtained at least triennially and are
at amortised cost using the effective which they occur. updated at each Balance Sheet date.
interest method. Loan notes that are The value of a net pension benefit
receivable within the year are not The net interest is determined by asset is limited to the amount that may
discounted. multiplying the net defined benefit be recovered either through reduced
liability by the discount rate at the contributions or agreed refunds from
(r) Creditors start of the period, taking into account the scheme.
Short term creditors are measured at any changes in the net defined benefit
the transaction price. Other financial liability during the period as a result of The resulting defined benefit asset or
liabilities, including bank loans, are contribution and benefit payments. The liability is presented separately after
measured initially at fair value, net of net interest is recognised in profit or other net assets on the face of the
transaction costs, and are measured loss as other finance revenue or cost. Balance Sheet. The pension charge
subsequently at amortised cost using is calculated on the basis of actuarial
the effective interest method. Re-measurements, comprising actuarial advice.
gains and losses, the effect of the
(s) Cash and cash equivalents asset ceiling and the return on the net Contributions payable to the defined
Cash is represented by cash in hand defined benefit liability (excluding contribution scheme are charged to the
and deposits with financial institutions. amounts included in net interest), Profit and Loss Account in the period
Cash equivalents are highly liquid are recognised immediately in other to which they become payable.
investments that mature in no more comprehensive income in the period in
than three months from the date which they occur. Re-measurements are
of acquisition and that are readily not reclassified to the Profit and Loss
convertible to known amounts of cash account in subsequent periods.
with insignificant risk of change
in value.

Annual Report 2015/16