2.
Significant accounting policies and other explanatory information (cont'd)
2A.
Significant accountingpolicies (cont'd)
Provisions
A liability or provision is recognised when there is a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can bemade of the amount of the obligation. A provision is made using
best estimates of theamount required in settlement andwhere theeffect of the time valueofmoney ismaterial,
the amount recognised is the present value of the expenditures expected to be required to settle the obligation
usingapre-tax rate that reflectscurrentmarket assessmentsof the timevalueofmoneyand the risksspecific to
theobligation. The increase in theprovisiondue topassageof time is recognisedas interest expense. Changes
in estimates are reflected in profit or loss in the reporting year they occur.
2B.
Other explanatory information
Funds
All income and expenditures are reflected in the statement of financial activities. Income and expenditures
specifically relating to any of the funds separately set up by the Society are allocated subsequently to those
funds. Fund balances restricted by outside sources are so indicated and are distinguished from unrestricted
funds allocated to specific purposes if any by action of themanagement. Externally restricted funds may only
be utilised in accordance with the purposes established by the source of such funds or through the terms of
an appeal and are in contrast with unrestricted funds over which management retains full control to use in
achieving any of its institutional purposes. An expense resulting from the operating activities of a fund that is
directly attributable to the fund is charged to that fund. Common expenses if any are allocated on a reasonable
basis to the funds based on amethodmost suitable to that common expense unless impractical to do so.
2C.
Critical judgements, assumptions and estimationuncertainties
There were no critical judgementsmade in the process of applying the accounting policies that have themost
significant effect on the amounts recognised in the financial statements. There were no key assumptions
concerning the future, and other key sources of estimation uncertainty at the end of the reporting year, that
have a significant risk of causing amaterial adjustment to the carrying amounts of assets and liabilities within
the next reporting year.
3.
Related party relationships and transactions
FRS 24 on related party disclosures requires the reporting entity to disclose: (a) transactions with its related
parties; and (b) relationships between parents and subsidiaries irrespective of whether there have been
transactions between those related parties. Aparty is related to a party if the party controls, or is controlled by,
or can significantly influence or is significantly influenced by the other party.
A related party includes the committee members and key management of the Foundation. It also includes an
entityor person that directlyor indirectly controls, is controlledby, or isunder commonor joint control with these
persons; members of the keymanagement personnel or closemembers of the family of any individual referred
to herein and others who have the ability to control, jointly control or significantly influence by or for which
significant voting power in such entity resides with, directly or indirectly, any such individual. Keymanagement
personnel include theExecutiveDirector and the direct reporting senior officers.
All committeemembers and staff members of the Foundation are required to read and understand the conflict
of interest policy in place and make full disclosure of interests and relationships that could potentially result
in a conflict of interests. When a conflict of interest situation arises, the members or staff shall abstain from
participating in the discussion, decisionmaking and voting on thematter.
Themembers of theManagement Committees are volunteers and receive nomonetary remuneration for their
contribution, except for reimbursement of out-of-pocket expenses.
42
