Reports and Financial Statements
for the year ended 31 July 2008
Cover
MISSION STATEMENT
UCL - London's Global University
We are

a world-class centre of research and teaching, dedicated to developing and
disseminating original knowledge to benefit the world of the future.
We believe

in engaging fully with the world around us;

in breaking new ground through challenging convention;

in progress through partnership.
We value

creativity and innovation;

independent thought;

integrity;

energy;

perseverance.
We are committed

to the pursuit of excellence and sustainability;

to maintaining rich academic diversity embracing the Arts and Sciences;

to equality of opportunity and fulfilment of potential for all our staff and
students.
We strive always

to lead;

to inspire;

to achieve.
Inside cover
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
CONTENTS
Page
2
Committee Membership
3
Financial Highlights
4
Operating and Financial Review
11
Corporate Governance
13
Responsibilities of the Council of University College London
15
Independent Auditors' Report to the Members of the Council of UCL
17
Statement of Principal Accounting Policies
22
Consolidated Income and Expenditure Account
23
Statement of Total Recognised Gains and Losses
24
Consolidated Balance Sheet
25
UCL Balance Sheet
26
Consolidated Cash Flow Statement
27-57
58
Notes to the Accounts
Financial Summaries (Unaudited)
1
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
COMMITTEE MEMBERSHIP
Council
Lay Members:
Lord Woolf of Barnes* (Chair until 31/3/2008)
Sir Stephen Wall* (Chair from 1/4/2008)
Sir John Birch* (Vice-Chair until 30/9/2008)
Ms Vivienne Parry* (Vice-Chair from 1/10/2008)
Ms Anne Bulford (Treasurer)
Mr Victor Chu (until 30/9/2008)
Ms Philippa Foster-Back (from 1/10/2008)
Academic Members:
Professor Malcolm Grant* (Provost)
Professor Iain Borden
Professor Robert Brown
Professor Richard Catlow (until 31/10/2007)
Dr Nikos Konstantinidis (from 1/10/2008)
Dr Mark Lancaster* (until 30/9/2008)
Dr Benet Salway*
Dr Andrea Townsend-Nicholson
Professor Maria Wyke (from 1/3/2008)
UCL Union:
Mr Andrew Fernando (until 31/7/2008)
Mr Ed Steward (from 1/8/2008)
Mr Jim Hunkin (until 31/7/2008)
Mr Nathanael Macdonald (from 1/8/2008)
Lord Hart of Chilton*
Mr Rob Holden
Mr Mark Knight
Ms Catherine Newman (from 1/10/2008)
Ms Katharine Roseveare (from 1/10/2008)
Professor Chris Thompson (from 1/1/2008)
Finance Committee
Lay Members:
Ms Anne Bulford (Chair)
Mr Nigel Buchanan
Mr David Dutton
Mr Robin Fox
Mr Derek Thomas
Sir Stephen Wall (from 1/4/2008)
Lord Woolf of Barnes (until 31/3/2008)
Academic Members:
Professor Malcolm Grant (Provost)
Dr Robert Barber
Professor Hazel Genn
Professor David Ingram
Dr Andrea Townsend-Nicholson
Professor Jonathan Wolff
UCL Union:
Ms Olivia Alford (until 31/8/2008)
Mr Nathanael Macdonald (from 1/9/2008)
Audit Committee
Lay Members:
Mr Mark Knight (Chair)
Sir John Birch (until 31/8/2008)
Mr Rob Holden (from 1/9/2008)
Mr John Hustler
Mr Nigel Smith
Investments Committee
Lay Members:
Mr Robin Fox
Mr Nigel Thomas
Ms Anne Bulford (Chair)
Mr Nigel Buchanan
Mr David Dutton

denotes also member of Remuneration Committee
* denotes also member of Nominations Committee
2
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
FINANCIAL HIGHLIGHTS
2008
£m
2007
£m
Change
%
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment income and interest receivable
193.8
107.8
211.2
112.3
10.7
178.8
97.8
201.7
111.9
9.4
8.4
10.2
4.7
0.4
13.8
Total income
Share of income from joint ventures
NET INCOME
635.8
(0.4)
635.4
599.6
(1.2)
598.4
6.0
TOTAL EXPENDITURE
634.5
590.4
7.5
(0.6)
5.2
0.2
(0.2)
0.5
(0.5)
(0.7)
(0.2)
0.4
(0.2)
(0.4)
5.5
6.9
Fixed assets
Endowment asset investments
Net current assets
581.7
65.5
35.5
531.2
74.2
45.1
9.5
(11.7)
(21.3)
Total assets less current liabilities
682.7
650.5
5.0
Non-current liabilities and provisions
Pension assets/(liabilities)
(81.5)
(5.9)
(82.9)
1.2
(1.7)
TOTAL NET ASSETS
Represented by:
595.3
568.8
4.7
Deferred grants
Endowments
Reserves
Minority interest
341.9
65.5
189.0
(1.1)
319.5
74.2
175.8
(0.7)
7.0
(11.7)
7.5
57.1
4.6)
(1.7)
15.4)
13.0)
2008
No.
2007
No.
20,170
9,037
19,365
8,904
CONSOLIDATED INCOME & EXPENDITURE ACCOUNT
Share of operating loss in joint ventures and associates
Profit on disposal of subsidiary
Profit/(loss) on disposal of tangible fixed assets
(Loss)/profit on disposal of fixed asset investments
Taxation
Minority interest
Transfer to accumulated income within specific endowments
SURPLUS FOR THE YEAR
6.2
CONSOLIDATED BALANCE SHEET
OTHER KEY STATISTICS
Consolidated recognised gains
Consolidated (decrease)/increase in cash flow
Student numbers
Average payroll numbers
3
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
OPERATING AND FINANCIAL REVIEW
The Council of UCL is responsible for this operating and financial review together with the
financial statements, as described on page 13. The format follows the Statement of
Recommended Practice (SORP): Accounting for Further and Higher Education. The SORP
was revised and re-issued in July 2007, following a period of consultation, to take account of
changes to Statements of Standard Accounting Practice, Financial Reporting Statements and
best accounting practice since the previous version, issued in 2003.
The year ended 31 July 2008 is the first to which SORP 2007 applies and is thus being
implemented as part of the preparation of these financial statements. As a result a number of
prior year adjustments have had to be made and the results for the year ended 31 July 2007
restated. Any significant adjustments have been highlighted appropriately and explained in the
section on Financial Results below.
The financial statements include the consolidated results of UCL’s subsidiary companies,
details of which are shown at Note 36 and whose commercial activities are, for legal and
taxation reasons, more appropriately channelled through limited companies.
This Operating and Financial Review has been prepared for UCL as a whole and therefore
gives greater emphasis to those matters which are significant to UCL when viewed as a whole.
Long term strategy & objectives
In June 2007 UCL emerged from a period of reflection and debate with the publication of a
new White Paper “Modernising UCL” laying out UCL’s strategy and aims for 2007–2012. The
focus is wholly on strengthening UCL’s world-class academic excellence in a financially
disciplined way. Themes include modernisation of administrative structures and information
systems and devolution of certain management responsibilities from the centre to faculty level
supported by investment in staff and facilities.
Another theme is of translation, of turning ideas into real-world solutions, and has been central
to discussions about UCL’s future. We want to create the most conducive environment for
transforming our scholarship into tangible benefits for the local community and beyond. We
realise that to do this, we must reach outwards and form relationships with organisations that
serve the community: whether these are business, research charities, hospitals, schools,
government, or others. During the course of the year UCL announced its involvement in a
number of partnerships and collaborations to further these aims.
A further theme of the White Paper was research. During the year UCL has developed and
implemented a robust, responsive and flexible evidence-based UCL Research Strategy
grounded on the precepts of innovation and managed risk. This strategy will enable UCL to
deliver excellence, generating global impact in a sustainable manner.
As part of this strategy, those areas in which new interdisciplinary partnerships can thrive have
been prioritised, and where critical mass will deliver novel achievements. These areas are
global in significance and will draw on expertise right across the arts and humanities, through
the social and physical sciences, to clinical medicine. They include global health, human
wellbeing, intercultural interactions and sustainable cities.
4
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
OPERATING AND FINANCIAL REVIEW (Continued)
Financial Results for 2007-08
Results for the year – Income & Expenditure
UCL’s summary consolidated Income and Expenditure results for the year ended 31 July 2008
are shown in the table below:£m
635.4
(634.5)
0.9
2007
(Restated)
598.4
(590.4)
8.0
(0.1)
(0.9)
5.2
0.2
6.0
7.3
(0.5)
(0.4)
5.5
6.9
2008
Income
Expenditure
Surplus before exceptional items
Net Share in joint ventures, associates, tax & minority
interests
Profit/(Loss) on disposal of subsidiary & fixed/tangible
fixed assets
Surplus on continuing operations
Transfer to accumulated income within specific
endowments
Surplus retained within general reserves
Total income increased from £598m to £635m. The increase of £37m arose primarily from
Funding Council grants (£15m), academic fees & support grants (£10m) and research grants
and contracts (£10m). Total expenditure rose by £45m to £635m with increases of £20m in
staff costs and £21m in other operating expenses. The surplus before exceptional items fell
from £8.0m to £0.9m. As these results demonstrate, despite tight controls and significant
levels of savings being achieved during the year, costs continue to rise faster than income.
During the course of the year UCL Business plc, our technology transfer company, announced
the sale of Stanmore Implants Worldwide, a company spun out from the Centre for Biomedical
Engineering, based at the UCL Institute of Orthopaedics. The profit on disposal of the shares
was £5.2m.
Results for the year – Balance Sheet
The balance sheet reflects continuing investment in infrastructure, with tangible fixed asset
additions totalling £90 million, £19m of which was on equipment and the remainder on land
and buildings. This now brings fixed asset additions to £492 million in the last 7 years.
UCL’s cash balances remained healthy throughout the year, closing at £82 million, £14 million
held as cash at bank and in hand and £68 million as short term investments (2007: total cash
balances £72 million with £16 million held as cash at bank and in hand and £56 million as
short term investments). This level of cash balances has arisen, to some extent, from the
timing of capital expenditure commitments and a bank loan of £22m drawn down in
anticipation of future cash requirements.
Heritage Assets
Heritage Assets are defined as “Assets that have historic, artistic, scientific, geophysical or
environmental qualities and are held and maintained principally for their contribution to
knowledge and culture”. The SORP requires these to be valued and disclosed in the balance
sheet where practicably possible.
UCL holds a significant number of artefacts that are covered by this definition which have been
collected since UCL was founded in 1826. No assets have been capitalised in the balance
sheet as the volume of items, the elapsed time since acquisition and the information available
on acquisition methods render the cost of identifying the appropriate accounting treatment
disproportionate to the benefit to be derived by users of the financial statements.
5
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
OPERATING AND FINANCIAL REVIEW (Continued)
Endowments
The new Higher Education SORP is now more aligned to the Charities SORP with respect to
recognising and accounting for charitable donations. This has had a significant consequence
on the accounting for endowments. In summary, funds donated with no specific purpose by the
donor and with no requirement for maintenance of the original capital can no longer be treated
as endowment funds and must be taken to the income and expenditure account in the year of
the gift.
We have undertaken an exercise to review the trust documents or nearest equivalent available
documentation in relation to UCL’s 800 plus endowment funds and have identified £28m of
funds which no longer meet the endowment definition under the SORP. Prior year
adjustments have been made to the income and expenditure account and the balance sheet in
accordance with the prescribed accounting treatment.
In terms of investment performance of the endowment funds world stock markets presented an
even higher degree of challenge to investors in 2007/08 particularly towards the end of the
year. Against this backdrop, the value of endowment asset investments dropped to £66m
million, compared to £74m million the year before. The value of the investments has continued
to fall since the balance sheet date as world markets continue to fall. Income from
endowments dropped slightly to £3.0m from £3.3m the previous year.
Operations
Partnerships and Collaborations
In December 2007 UCL announced that, together with Cancer Research UK, the Medical
Research Council and the Wellcome Trust, it would be part of a consortium to build and
operate the UK Centre for Medical Research and Innovation. The UKCMRI will maintain the
UK’s place at the forefront of international medical research by providing state of the art
scientific facilities and infrastructure, as well as access to teaching and specialist hospitals.
This will be a significant investment for UCL over the coming years.
In June 2008 UCL launched a platform on iTunes U through which users can download
lectures, interviews, seminars by UCL academics and news about UCL research in audio or
video format to their iPod or computer. Until that time only North American universities had
featured on iTunes U and UCL was the first mainstream UK university to introduce global
participation in iTunes U.
Another opportunity to extend our outreach work within London was confirmed in November
2007, when UCL was named as one of six Beacons of Public Engagement nationwide and the
only one in the capital. As a Beacon, UCL will build on its extensive existing outreach
programme with schools, colleges, museums, and community and other relevant groups in
collaboration with partners including the Southbank Centre and the British Museum.
In May UCL announced it will become the first UK university with a campus in Australia. The
School will start work in 2009, and become fully operational in 2010. The School will take up to
60 students on its two-year Masters programme in Energy and Resources, and it will also offer
a portfolio of Executive Education programmes tailored to meet the requirements of senior
industry executives and engineering managers.
During the year UCL was also announced as the preferred partner for an academy school in
Camden. The new academy will bring to the borough 900 much-needed school places for 11–
16 year olds, plus an extra 25 sixth-form places. UCL will provide its expertise to ensure that
this is a centre of excellence for the teaching of maths and science, with an additional focus on
global citizenship and languages. This emphasis on global citizenship reflects our role as
London’s global university.
6
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
OPERATING AND FINANCIAL REVIEW (Continued)
League Tables & Rankings
UCL has maintained its performance in a number of global league tables and rankings in the
past year.
In November 2007 UCL entered the top ten of the THES-QS World University Rankings for the
first time. It was placed 9th on the rankings thereby joining Oxford, Cambridge and Imperial
College in the global top ten. UCL was the fastest rising of any of the institutions in the Top 20
having moved up from 25th the previous year.
The ISI Web of Knowledge’s Essential Science Indicators ranked UCL as 13th in the world and
the most cited UK institution. The number of citations generated by academic publications is a
useful indication of institutional importance and influence. Particular areas of strength were
Biomedicine and General Social Sciences.
The latest version of the Shanghai Jiao Tong University’s annual Academic Rankings of World
Universities indicates that UCL’s place among the world’s leading universities has risen again.
UCL is now ranked: 22nd in the world, up from 25th in 2007, third in Europe and first in
London.
Students
Student numbers were up 805 on the previous year at 20,170 with Home/EU students
representing 77%, up 1% from the previous year. The quality of the student experience is an
important indicator for UCL. At their Awayday in January the UCL Council had the opportunity
to consider all aspects from initial enquiry to graduation. In the 2008 National Student Survey
88% (87% in 2007) of UCL final-year students responding declared themselves satisfied with
the quality of their courses. This compared with a national figure of 83% (81% in 2007). Among
Russell Group universities, UCL was placed top in London and joint third nationally in overall
satisfaction. The survey is an opportunity to give feedback on all aspects of university life
including course teaching, assessment and feedback; academic support, organisation and
management, learning resources and personal development. As in previous years, the
university will use the detailed results to understand better how to improve the student
experience at UCL.
Staff and Their Involvement
In the course of the year, UCL has reviewed progress in implementing its HR Strategy. This
review was in partnership with its trade unions and also involved staff from across UCL. The
results of the review will inform action plans for the final two years of strategy implementation
and the revision of the strategy in 2010. The outcome of the review has been reported to
HEFCE which has confirmed the last tranche of hypothecated funding which supports the
strategy in the coming financial year.
Key employment indicators are reviewed by UCL Council annually and include staff turnover,
progress against workforce equality targets, appraisal completion rates, training take up and
recruitment success. These show a healthy organisational profile and data are benchmarked
against the sector average and other areas of the public sector wherever possible. Effective
appraisal forms the cornerstone of UCL’s performance management arrangements and the
appraisal completion rate has improved markedly over the last year almost reaching the target
of 95% completion by the end of the year. In tandem with this, UCL’s expectations in terms of
management competencies have been published this year and the internal training
programme has been revised to link more explicitly to those competencies in order to better
develop a cohort of managers able to lead a world class university in challenging times.
7
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
OPERATING AND FINANCIAL REVIEW (Continued)
Estates
The year saw the completion of work on the refurbishment of Foster Court and other buildings
on the east side of Malet Place, the new wing of the Roberts Engineering Building, fronting
onto Torrington Place, the refurbishment of the Laws reading rooms in the Wilkins Library, a
new infill building at 33 Queen Square for the UCL Institute of Neurology, the refurbishment of
the space outside the South Junction and the opening of the new Print Room Café.
Work also started on the DMS Watson Library to provide a new learning laboratory in the
science library, and phase 2 of the refurbishment of Foster Court. The Turner Laboratory in the
Chemistry Department’s Christopher Ingold Building is also being refurbished. Many other
projects are under way or imminent across the whole estate focussing on areas where there is
more urgent need for maintenance or refurbishment.
Estates Division, together with all members of the UCL community, has been working towards
a greener, more sustainable UCL. An Environmental Sustainability Group is now meeting
regularly to discuss the progress of UCL environmental sustainability initiatives. These include
a plan to reduce UCL’s carbon emissions and further expansion of the existing waste
management strategy, which is reducing the proportion of UCL’s waste going into landfills, and
increasing re-use and recycling. Across the university, many environmental initiatives are now
underway. 25 per cent of total waste at UCL is already directed away from landfill to recycling,
or other treatments.
Fundraising & UCL Campaign
The work of the Development & Corporate Communications Office includes fundraising (major
gifts, annual fund, trusts and foundations, and legacy initiatives), alumni relations, parent
relations, media relations and all other print and electronic communications programmes and
internal development services operations. In the past year, we undertook a significant review
of the structure and progress towards the Campaign for UCL. We have now crossed the £100
million mark toward our goal of £300 million by 2014. Meetings have been held with Deans
and Heads of Department to identify fundraising priorities. The Campaign will be aligned with
the Grand Challenges vision for UCL research and will use the sub-heading “An Obligation to
Lead”.
Donor cultivation and solicitation programmes are underway among different
constituents in key centres around the world.
We have made important progress in the last year in embedding a strategic approach to
communications across the organisation; continuing to develop our understanding of key
audiences and how we can best communicate with each; and finding ways of bringing the
excellence and diversity of UCL to life for the people we seek to influence. Market research
undertaken in the last year has guided us as to how we should engage with key opinionformers, which will influence our range of events and networking opportunities, corporate
publications, media work and web presence.
Future Outlook
The main drivers of income for the University are research activity, Higher Education Funding
Council for England (HEFCE) grants and student fees.
As a result of its past research activity in the Research Assessment Exercise (RAE) 2008,
UCL has submitted over 1,800 staff in 49 Units of Assessment and the results of the exercise
will be available in December 2008. The next stage will be a review of how the quality-related
research funding for universities (QR) is to be allocated. There will be no additional funding to
reflect the anticipated uplift in research quality and volume (the total number of staff submitted
has gone up by 12.5% from the last exercise), so HEFCE will need to choose how far to
concentrate funding on the highest performing departments in order to reward and promote
them, as opposed to spreading it more thinly across the whole sector. QR is one of
8
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
OPERATING AND FINANCIAL REVIEW (Continued)
UCL's most significant sources of income. It currently exceeds grant-income from the research
councils, and with the added benefit that it provides core-funding that is not tied to individual
research projects. It also affects the amount of capital funding allocated to UCL. So the
outcome of RAE 2008 is a significant factor in UCL’s future success.
UCL continues to be successful in securing competitively won research grant income. Despite
this past record of achievement, there is always scope for improvement. In the increasingly
competitive national and international research arena, UCL will need to take every opportunity
to maintain and enhance its funding potential and to extend and diversify its portfolio of funding
sources. Practical measures to address these issues are being introduced to improve UCL’s
competitiveness and to maximise its research income from all sources.
The institution will seek to increase the number and quality of grant applications especially for
longer term awards, by providing a greater level of support for applicants including increased
administrative support for the application process. UCL will also be investing in the recruitment
of Research Facilitators to provide an interface between the research community within the
institution and the funding agencies. They will operate in a proactive manner, supporting
academics in the preparation of grant applications and providing up-to-date intelligence about
funding opportunities and the changing priorities of the funders, national and international,
public and private.
With its size and diversity, UCL is uniquely well placed to respond to the increasing number of
major interdisciplinary programmes that require expertise across a range of subjects and
Faculties. It has already enjoyed significant successes in these types of awards, in
Nanotechnology and Imaging for example. However, to ensure that this trend continues, UCL
will need to adopt a more pro-active and co-ordinated approach to planning by building on
current best practice and ensuring that the university is well prepared to respond effectively to
future initiatives.
Another income driver is student activity – and in particular student numbers and fee levels.
During the year a working party has been developing a student number framework for future
years looking at both these factors. This work will be on-going but geopolitical and economic
developments outside of UCL’s control could have a major impact on the delivery of the
framework. At the same time it would be reasonable to assume that the level of future
increases in the teaching grant from HEFCE will be relatively modest given constraints on
government spending.
As far as expenditure is concerned the University’s most significant costs drivers are staff and
estates costs. Staff costs represent over 60% of total expenditure. 2008 represents the last
year of the three year UCEA pay deal and staff have received a 3% pay rise in May 2008 and
another of 5% in October 2008. This means that without any other changes the basic salary
bill for 2008/09 will go up by over 7%. Additionally the Universities Superannuation Scheme
(USS), UCL's largest pension provider, will shortly announce the results of its latest actuarial
valuation for 31st March 2008. At that time the USS trustees will be required to outline any
recommendations that are needed to ensure the scheme is fully funded.
Like all universities in the scheme, UCL will need to consider the impact of these. The last
previous valuation for USS was in 2005 and at that time the funding level of the scheme was
77%; and since that time there has been considerable volatility in world markets and interim
funding levels estimates have risen and then fallen. As a consequence, it is widely expected
that USS will seek an increase in contributions in the future, starting in August 2009. This will
further add to pressures on staff costs. All these factors are the context within which the next
pay negotiations will be conducted.
9
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
OPERATING AND FINANCIAL REVIEW (Continued)
Estates costs comprise both capital and revenue costs. On the capital side this year was the
last year of the SRIF3 funding. From April a new scheme, the Capital Investment Framework,
provides £110m over the next 3 years. As with SRIF3, a significant proportion of available
funds will be allocated to acquiring and installing major items of scientific equipment. After that
a prioritisation process has been undertaken to rank the numerous competing new-build and
refurbishment schemes, involving teaching as well as research space. Although a growing
number of departments are now well-housed, too many still are not. In addition to upgrading
laboratories, teaching, library and study areas all require significant investment. If UCL is to
have the quantity and quality of estate that is fit for world-class teaching and research then
additional funds will also need to be found. At the same time UCL continues to increase its
revenue spending on long term maintenance to supplement this capital expenditure although
still not at the level needed to reduce the maintenance backlog.
Together with other organisations large increases in energy costs need to be accommodated.
Spend in 2007-08 was 20% higher than the previous year despite advantageous deals with
providers and we expect energy costs to rise by another third in 2008-09.
Conclusion
Once again, it is encouraging that UCL has been able to record a steady increase in income.
However expenditure continues to rise more quickly resulting in a small surplus position for the
year. Behind these figures are the substantial efforts made by staff across the whole of UCL
towards achieving savings targets on the operating budget. However, with financial pressures
likely to increase over the next few years, the underlying position will demand further
significant effort to manage more effectively the resources at UCL’s disposal if financial
sustainability is to be achieved whilst maintaining our vision of enhanced academic quality
through the pursuit of international excellence.
Anne Bulford
Treasurer
Sir Stephen Wall
Chair of Council
10
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
CORPORATE GOVERNANCE
UCL is committed to exhibiting best practice in all aspects of corporate governance and
endeavours to conduct its business in accordance with the seven principles identified by the
Committee on Standards in Public Life (selflessness, integrity, objectivity, accountability,
openness, honesty and leadership).
This summary describes the manner in which UCL has applied the principles set out in Section
1 of the Combined Code on Corporate Governance issued by the London Stock Exchange in
June 1998 and revised in July 2003 in so far as they relate to Higher Education Institutions. Its
purpose is to help the reader of the accounts understand how the principles have been
applied. UCL keeps under careful review its organisation and arrangements to ensure that the
best principles of Governance and Management are maintained in a manner appropriate to the
nature and character of the institution. In so doing, it takes into careful account such guidance
as set out for example in the Combined Code, the Reports of the Committee on Standards in
Public Life and the CUC Governance Code of Practice.
UCL‘s Governing Body, the Council, has taken account of the CUC’s governance code of
practice and general principles within the CUC Guide for Higher Education Governing Bodies
in the UK issued in 2004, and confirmed that UCL’s practices are consistent with the
provisions of the code with the exception that the results of effectiveness reviews are not
published widely.
The Council is responsible for the system of internal control operating within UCL and its
subsidiary undertakings (“the Group”) and for reviewing its effectiveness. Such a system can
only provide reasonable, and not absolute, assurance against material misstatement or loss,
and cannot eliminate business risk. The Council identifies areas for improvement in the
system of internal control, based on reports and views from the Audit Committee, Academic
Board and other committees.
At its November 2008 meeting, the Council will carry out an annual assessment for the year
ended 31 July 2008 by considering a report from the Audit Committee, and taking account of
events since 31 July 2008. The Council is of the view that there is an ongoing process for
identifying, evaluating and managing the Group’s key risks and internal controls, and that it
has been in place for the whole of the year ended 31 July 2008, and up to the date of approval
of the annual report and accounts, that the process has been subject to regular review, and
that it accords with the internal control guidance for directors on the Combined Code, as
deemed appropriate for higher education.
In accordance with the Statutes of UCL, the Council comprises lay members, the President
and Provost (Provost hereafter), academic staff members and student members (in numbers
specified by Statute). The Statutes provide for the distinct roles of Chair and Vice-Chair of the
Council, the Treasurer, and of UCL's Chief Executive, the Provost. The powers and duties of
the Council are set out in Statutes; by custom and under the Financial Memorandum with the
Higher Education Funding Council for England, the Council holds to itself the responsibilities
for the ongoing strategic direction of UCL, approval of major developments and the receipt of
regular reports from UCL officers on the day to day operations of its business and its
subsidiary companies. The Council has formally identified those items of business which it
retains to itself for collective decision. The Council meets at least three times each year; it has
several committees, including an Academic Board, Finance Committee, Audit Committee, Risk
and Efficiency Committee, Remuneration Committee and Nominations Committee. All of these
Committees are formally constituted with Terms of Reference.
In accordance with the Regulations for Management of UCL, the Finance Committee
comprises lay members, the Provost and academic staff members (in numbers specified by
regulation). The Committee meets at least five times annually, and is chaired by the Treasurer.
Inter alia they recommend to the Council UCL's annual revenue and capital budgets and
monitor performance in relation to the approved budgets and review UCL's annual financial
statements. They also review UCL's accounting policies which are applied in the preparation of
those financial statements. The Committee also receives and considers
11
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
CORPORATE GOVERNANCE (Continued)
reports from the Higher Education Funding Council for England as they affect UCL's business
and monitors adherence with the regulatory requirements.
The Investments Committee, which reports to Finance Committee, is chaired by the Treasurer
and comprises four other lay members with investment expertise appointed by Council. It
governs, manages and regulates the investments of UCL.
The Audit Committee, which meets at least three times annually, is chaired by a lay member of
Council and comprises lay members only. They are responsible for meeting with External
Auditors to consider the nature and scope of the annual audit and, thereafter discuss audit
findings, the management letter and internal control report arising out of the audit of the annual
financial statements. The Committee considers reports from the Internal Auditors arising from
their audits, which highlight significant issues and management’s response thereon. Whilst
UCL officers attend the meetings of the Audit Committee as necessary, they are not members
of the Committee, and the Committee meets from time to time with the External Auditors on
their own for independent discussions. The Audit Committee also approves the annual
programme of UCL’s Internal Audit Services and reviews the conclusions of the latter’s work.
Audit plans are drawn up based on assessment of relative risks and significance of each
operating area and their materiality in the context of overall UCL activity. In complying with
Code provision D.2.1 (to conduct, at least annually, a review of the Group’s system of internal
controls), the Audit Committee conducts a high level review of the arrangements for internal
control, with regular consideration of risk and control, based on reports received from the Risk
and Efficiency Committee, with emphasis given to obtaining the relevant degree of assurance
and not merely reporting by exception. It reports to the Council the results of this review.
The Risk and Efficiency Committee includes the Vice-Provosts for Administration and
Academic/International Matters, the Dean of Students, and the heads of UCL’s Corporate
Support Services; the Director of Internal Audit Services is in attendance at meetings. The
Committee was established to develop a strategy for the implementation of a Risk Assessment
and Management Policy, including the methodology for identifying and assessing significant
risks on a continuous basis and ensuring that procedures are in place for those identified risks
to be managed, monitored and reviewed in a consistent and effective manner. The Committee
reviews, on a regular basis, the risk management and control process to consider what
changes, if necessary, should be recommended. It may also consider key risks identified
throughout UCL, for example on academic matters. It reports to the Audit Committee at termly
intervals, or more frequently, should the need arise.
The Academic Committee, which reports to the Council via the Academic Board, is responsible
for inter alia monitoring the effectiveness of the academic quality assurance strategy,
encompassing policies and procedures in respect of quality management and quality
enhancement.
The Nominations Committee considers the filling of vacancies in the lay membership of
Council and of other UCL Committees (except the Nominations Committee, for which Council
itself considers vacancies in the lay membership).
The Remuneration Committee is chaired by the Chair of Council and comprises three other
members of Council and the Provost. It determines the annual remuneration of senior officers
of UCL and where necessary decides on any severance payments. The Provost is excluded
from discussions relating to his own remuneration package. The Remuneration Committee
also receives a report of the annual review of all professorial salaries and administrative
equivalents not otherwise considered by it. The remuneration of these staff is determined by
the Provost in consultation with relevant Vice-Provosts and Deans and the Director of Human
Resources. Salary levels are set to attract and retain members of staff for the successful
operation of UCL, both academically and administratively, and incorporate rewards for
individual performance. No remuneration is paid to lay members of the Council or any of its
Committees.
12
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
RESPONSIBILITIES OF THE COUNCIL OF UNIVERSITY COLLEGE LONDON
In accordance with UCL's Charter and Statutes, the Council is responsible for the
administration and management of the affairs of UCL, including ensuring an effective system
of internal control, and is required to present audited financial statements for each financial
year.
The Council is responsible for the keeping of proper accounting records which disclose with
reasonable accuracy at any time the financial position of UCL and for ensuring that the
financial statements are prepared in accordance with UCL's Charter and Statutes, the
Statement of Recommended Practice: Accounting for Further and Higher Education and other
relevant accounting standards. In addition, within the terms and conditions of the Financial
Memorandum agreed between the Higher Education Funding Council for England and the
Council of UCL, the Council, through the Provost, its designated office holder, is required to
prepare financial statements for each financial year which give a true and fair view of the state
of affairs of UCL and of the surplus or deficit and cash flows for that year.
In causing the financial statements to be prepared, the Council has ensured that:
(i)
suitable accounting policies are selected and applied consistently;
(ii)
judgments and estimates are made that are reasonable and prudent;
(iii)
applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements;
(iv)
financial statements are prepared on the going concern basis. The Council is satisfied
that it has adequate resources to continue in operation for the foreseeable future and
for this reason the going concern basis continues to be adopted in the preparation of
the financial statements.
The Council has taken reasonable steps to:
(i)
ensure that funds from the Higher Education Funding Council for England are used
only for the purposes for which they have been given and in accordance with the
Financial Memorandum with the Funding Council and any other conditions which the
Funding Council may from time to time prescribe;
(ii)
ensure that there are appropriate financial and management controls in place to
safeguard public funds and funds from other sources;
(iii)
safeguard the assets of UCL and prevent and detect fraud;
(iv)
secure the economical, efficient and effective management of UCL's resources and
expenditure.
13
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
RESPONSIBILITIES OF THE COUNCIL OF UNIVERSITY COLLEGE LONDON
(Continued)
The key elements of UCL’s system of internal control, which is designed to discharge the
responsibilities set out above, include the following:
(i)
clear definitions of the responsibilities of, and authority delegated to, heads of
academic and administrative departments;
(ii)
comprehensive Financial Regulations, detailing financial controls and procedures,
approved by the Council;
(iii)
a professional Internal Audit Service whose annual programme of work is approved by
Audit Committee endorsed by the Council, and whose head provides the Provost,
Audit Committee and Council, with a report on internal audit activity within UCL and an
opinion on the adequacy and effectiveness of UCL’s system of internal control,
including internal financial control;
(iv)
regular reviews of financial performance and key business risks, and termly reviews of
financial forecasts including variance reporting and updating;
(v)
a comprehensive planning process for the short-term to medium term supported by
detailed income, expenditure, capital and cash flow budgets and forecasts, including
review and refresh of strategic objectives, the key risks affecting their achievement
and key performance indicators of progress.
(vi)
embedded risk management policies and procedures incorporating identification,
monitoring and review of internal controls moderating and mitigating key risks,
covering all categories of risk at all levels of the organisation.
(vii)
clearly defined procedures for the approval and control of expenditure, with investment
decisions involving capital or recurrent expenditure being subject to formal detailed
review according to levels set by the Council.
Any system of internal control can only provide reasonable, and not absolute, assurance
against material misstatement or loss.
14
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF
THE COUNCIL OF UNIVERSITY COLLEGE LONDON
We have audited the financial statements of University College London for the year ended 31
July 2008 which comprise the statement of principal accounting policies, the consolidated
income and expenditure account, the consolidated statement of total recognised gains and
losses, the consolidated and entity balance sheets, the consolidated cash flow statement, and
the related notes 1 to 37. These financial statements have been prepared under the
accounting policies set out therein.
This report is made solely to the Council of University College London, as a body, in
accordance with the Financial Memorandum dated July 2006. Our audit work has been
undertaken so that we might state to the Council’s members those matters we are required to
state to them in an auditors' report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than the Council and the
Council’s members as a body, for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of The Council and auditors
As described in the statement of the responsibilities of the Council, the Council is responsible
for the preparation of the financial statements in accordance with UCL’s statute, the Statement
of Recommended Practice on Accounting for Further and Higher Education and other
applicable United Kingdom law and accounting standards (United Kingdom Generally
Accepted Accounting Practice).
Our responsibility is to audit the financial statements in accordance with relevant United
Kingdom legal and regulatory requirements and International Standards on Auditing (UK and
Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view
and are properly prepared in accordance with the Statement of Recommended Practice on
Accounting for Further and Higher Education. We also report whether income from funding
bodies, grants and income for specific purposes and from other restricted funds administered
by University College London have been properly applied only for the purposes for which they
were received and whether income has been applied in accordance with the Statutes and,
where appropriate, with the Financial Memorandum with the Higher Education Funding
Council for England.
We also report if, in our opinion, the operating and financial review is not consistent with the
financial statements, if the Group has not kept proper accounting records, the accounting
records do not agree with the financial statements or if we have not received all the information
and explanations we require for our audit.
We also, at the request of the Council, review whether the corporate governance statement
reflects the Group’s compliance with the four provisions of the Combined Code specified for
our review by Council and we report if it does not. We are not required to consider whether the
Council’s statements on internal control cover all the risks and controls, or form an opinion on
the effectiveness of the Group’s corporate governance procedures or its risk and control
procedures.
We read the other information contained in the operating and financial review, and the
corporate governance statement, and consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies with the financial statements.
Basis of opinion
We conducted our audit in accordance with International Standards on Auditing issued by the
Auditing Practices Board and the Audit Code of Practice issued by the Higher Education
Funding Council for England. An audit includes examination, on a test basis, of evidence
15
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF
THE COUNCIL OF UNIVERSITY COLLEGE LONDON (Continued)
relevant to the amounts and disclosures in the financial statements. It also includes an
assessment of the significant estimates and judgements made by the Board of Governors in
the preparation of the financial statements and of whether the accounting policies are
appropriate to the Group’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which
we considered necessary in order to provide us with sufficient evidence to give reasonable
assurance that the financial statements are free from material misstatement, whether caused
by fraud or other irregularity or error. In forming our opinion, we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Opinion
In our opinion:
(a)
(b)
(c)
the financial statements give a true and fair view of the state of affairs of the University
and the Group as at 31 July 2008 and of the surplus of the Group for the year then
ended and have been properly prepared in accordance with the Statement of
Recommended Practice on Accounting for Further and Higher Education;
in all material respects income from Higher Education Funding Council for England,
grants and income for specific purposes and from other restricted funds administered
by the University have been applied only for the purposes for which they were
received; and
in all material respects income has been applied in accordance with UCL’s statutes
and, where appropriate, with the Financial Memorandum, dated July 2006 with the
Higher Education Funding Council for England.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
St. Albans
United Kingdom
November 2008
16
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
1.
Basis of Preparation
The financial statements are prepared under the historical cost convention as modified
by the revaluation of investments and in accordance with both the Statement of
Recommended Practice: Accounting for Further and Higher Education (SORP) 2007
and applicable United Kingdom Accounting Standards.
The year ended 31 July 2008 is the first to which SORP 2007 applies. As a result a
number of prior year adjustments have had to be made and the results and financial
position for the year ended 31 July 2007 restated. Any significant adjustments have
been highlighted appropriately and explained in the notes to the accounts.
2.
Basis of Consolidation
The consolidated financial statements consolidate the financial statements of UCL and
its subsidiary undertakings (collectively referred to as “the Group”) for the financial
year to 31 July. The results of subsidiaries acquired or disposed of during the period
are included in the consolidated income and expenditure account from the date of
acquisition or up to the date of disposal. Intra-group transactions are eliminated on
consolidation.
The UCL Union has not been consolidated since it is a separate enterprise over which
UCL has limited influence both in areas of financial control and policy decisions.
3.
Income and Expenditure Account
The income and expenditure account has been drawn up in line with the SORP and
with classifications based on the requirements of the annual financial return made to
the Higher Education Statistics Agency.
Funding Council block grants are accounted for in the period to which they relate.
Funding Council grants to fund special initiatives are credited to the income and
expenditure account in line with the delivery of each initiative. Any payments received
in advance of service delivery are recognized in the balance sheet as liabilities.
Tuition fee income is stated gross and credited to the income and expenditure account
over the period in which students are studying. Bursaries and scholarships are
accounted for gross as expenditure and not deducted from income.
Income received from research grants and contracts is included to the extent only of
expenditure incurred during the year, together with any related overhead contributions
towards costs.
Other income and income in respect of other services rendered are accounted for on
an accruals basis and credited to the income and expenditure account to the extent of
the completion of the contract or service concerned. Any payments received in
advance of service delivery are recognized in the balance sheet as liabilities.
Income from the sale of goods or services is credited to the income and expenditure
account when the goods or services are supplied to the external customer or the terms
of the contract have been satisfied.
Income from general donations to support revenue expenditure is credited to the
income and expenditure account in full in the year in which it is receivable. Any portion
remaining unspent at the end of the financial year is credited to an earmarked income
and expenditure reserve in the balance sheet.
17
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued)
Income received from endowments is credited to the income and expenditure account
in the period in which it is earned. Income from specific endowments not expended in
the year is transferred from the income and expenditure account to a specific
endowment reserve fund. Realised gains or losses arising from dealing in assets
underlying endowment funds are retained within the endowment in the balance sheet.
Increases or decreases in value arising on the revaluation or disposal of endowment
assets is added to or subtracted from the funds concerned and accounted for through
the balance sheet by debiting or crediting the endowment asset, crediting or debiting
the endowment fund and is reported in the statement of total recognised gains and
losses.
Any increase in value arising on the revaluation of fixed asset investments is carried
as a credit to the revaluation reserve, via the statement of total recognised gains and
losses; a diminution in value is charged to the income and expenditure account as a
debit, to the extent that it is not covered by a previous revaluation surplus.
Income is deferred only when the Group has to fulfill conditions before becoming
entitled to it or where it has been specified by the donor that the money can be
expensed in a future period.
Expenditure incurred relates to the receipt of goods and services. A provision for bad
debts is included on the basis that as debts become older a higher percentage
become irrecoverable.
Where the Group disburses funds it has received as paying agent on behalf of the
Funding Council or other body, and has no beneficial interest in the funds, the receipt
and subsequent disbursement of the funds has been excluded from the income and
expenditure account.
4.
Pension Arrangements
The Group contributes to three principal pension schemes on behalf of its employees:
the Universities Superannuation Scheme (USS), the Superannuation Arrangements of
the University of London (SAUL) and the National Health Service Pension Scheme.
Contributions are also made to two smaller schemes, the Federated Pension Scheme
(FPS) and the Royal Free Hospital School of Medicine Pension and Assurance
Scheme (RFHSM) both of which are closed to new members.
All are defined benefit schemes. The USS, SAUL and the NHS Pension Scheme are
multi-employer schemes and it is not possible to identify UCL’s share of the underlying
assets and liabilities. Therefore, as required by FRS 17, the contributions are charged
directly to the income and expenditure account as if the schemes were defined
contribution schemes.
The FPS and RFHSM are single employer defined benefit schemes accounted for in
accordance with FRS 17. The amounts charged to the income and expenditure
account are the current service costs and gains and losses on settlements and
curtailments. They are included as part of staff costs. Past service costs are
recognised immediately in the income and expenditure account if the benefits have
vested in the scheme membership. If the benefits have not vested immediately, the
costs are recognised over the period until vesting occurs. The interest cost and the
expected return on assets are shown as a net amount of other finance costs or credits
adjacent to interest. Actuarial gains and losses are recognised immediately in the
statement of total recognised gains and losses.
18
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued)
The FPS and RFHSM schemes are funded, with the assets of the schemes held
separately from those of the group, in separate trustee administered funds. Pension
scheme assets are measured at fair value and liabilities are measured on an actuarial
basis using the projected unit method and discounted at a rate equivalent to the
current rate of return on a high quality corporate bond of equivalent currency and term
to the scheme liabilities. The actuarial valuations are obtained at least triennially and
are updated at each balance sheet date. The resulting defined benefit asset or liability,
net of the related deferred tax, is presented separately after other net assets
on the face of the balance sheet.
5.
Accounting for Research and Development
Expenditure on pure and applied research is expensed, and is treated as part of the
continuing activities of the Institution. Expenditure on development activities is carried
forward and amortised over the period expected to benefit, where the conditions of
SSAP 13 are met.
6.
Foreign Currencies
Transactions denominated in foreign currencies are recorded at the rate of exchange
ruling at the dates of the transactions. Monetary assets and liabilities denominated in
foreign currencies are translated into sterling at year end rates. The resulting
exchange differences are dealt with in the determination of income and expenditure for
the financial year unless such funds are held for onward transmission to a research
partner under an agency agreement, in which case they are included in creditors.
7.
Taxation
UCL enjoys charitable status and is therefore potentially exempt from taxation in
respect of most income under Section 505 of the Income and Corporation Taxes Act
1988 and in respect of capital gains under Section 256 of the Taxation of Chargeable
Gains Act 1992, to the extent that they are applied for its charitable purposes.
Subsidiary companies are liable to corporation tax.
UCL is partially exempt for the purposes of Value Added Tax and is only able to
reclaim a minor element of VAT charged on goods and services bought in.
8.
Land and Buildings
Land and Buildings are stated in the Balance Sheet at cost where purchased or
constructed by the Group, or valuation where acquired through donation or via the
exchange of non-monetary consideration. Freehold buildings are depreciated on a
straight line basis over their expected useful lives of 50 years. Land which is held
freehold is not depreciated and that held on long leasehold is depreciated over the life
of the lease up to a maximum of 50 years.
Major refurbishments and fixtures and fittings are capitalised and depreciated as
follows:
Major refurbishments
Fixtures and fittings
20 years
10 years
19
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued)
9.
Equipment
Expenditure on furniture and equipment costing less than £25,000 is written off to the
income and expenditure account in full in the year of acquisition.
Equipment and furniture costing more than £25,000 is capitalised at cost, and
depreciated over its expected useful life as follows:
Equipment funded by research grants
Other furniture and equipment
10.
Term of grant
5 years
Acquisition with the aid of specific grants
Where tangible fixed assets, including Heritage Assets acquired on or after 1 July
2006 (see below), but excluding freehold land, are acquired with the aid of specific
grants, they are capitalised and depreciated as above. The related grants are credited
to a deferred capital grant account, and are released to the income and expenditure
account over the expected useful economic life of the related asset on a basis
consistent with the depreciation policy.
Specific grants received to fund the purchase of freehold land are credited directly to
the income and expenditure account in the year of the purchase.
11.
Leased Assets
Finance lease obligations are included within creditors. Financing amounts are
charged to the income and expenditure account so as to produce a constant periodic
charge on the balance outstanding. Assets held under finance leases are capitalised
and depreciated over the shorter of the lease term or the expected useful lives of
equivalent owned assets.
Operating lease costs are charged to the income and expenditure account in the year
in which they are incurred.
12.
Heritage Assets
Individual objects, collections, specimens or structures with historic, artistic, scientific,
technological, geophysical or environmental qualities that are held and maintained
principally for their contribution to knowledge and culture are termed Heritage Assets.
st
Heritage assets acquired on or after 1 July 2006, whether donated, purchased or on
loan, are capitalised and recognised in the balance sheet at cost or valuation, where
such cost or valuation is reasonably obtainable or reliable and amounts to £25,000 or
more.
Items donated or on loan are valued by internal valuers. In exceptional cases, where
items are of a rare or unusual nature, an external valuation may be sought.
Heritage assets acquired prior to 1st July 2006 have not been capitalised due to the
difficulty and cost of attributing a reliable cost or value to them, in particular due to the
significant cost involved in the reconstruction and analysis of past accounting records
required to do so.
The useful economic lives of assets capitalised are considered and depreciation
provided accordingly where they are considered to be finite.
20
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2008
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued)
13.
Patents, licences, rights, trade marks and other similar rights over assets
Expenditure on patents, licenses, rights, trade marks and other similar rights over
assets is charged to the income and expenditure account in full, in the year in which
they are incurred.
14.
Investments
Endowment Asset Investments and fixed asset investments in listed securities are
stated at market value in the Balance Sheet. Subsidiary and associate company
investments are stated at cost less provision for impairment.
Current asset investments are shown at the lower of cost or net realisable value.
In the consolidated accounts the Group’s share of the results in joint ventures is
shown each year in the income and expenditure account and the group’s share of
gross assets and liabilities is recognized on the balance sheet.
15.
Stores
Stores are made up of goods for resale, centrally held stores holdings and major
stores held by academic departments and are stated at the lower of cost or net
realisable value.
16.
Cash Flows and Liquid Resources
Cash flows comprise increases or decreases in cash. Cash includes cash in hand and
overdrafts.
Liquid resources comprise assets held as a readily disposable store of value. They
include current asset investments and endowment cash balances.
21