The Registered Housing Associations (Accounting Requirements) Order 1988

Article 4(2)

SCHEDULE 7 MODIFIED ACCOUNTING REQUIREMENTS FOR APPLICATION TO SMALL ASSOCIATIONS IN ACCORDANCE WITH ARTICLE 4(2)

1.  In article 2 (interpretation), there shall be substituted for the definition of “accounts” and “notes to the accounts” the following–

““accounts” means the balance sheet, income and expenditure account, and notes to the accounts;

“notes to the accounts” means notes to the balance sheet, income and expenditure account and the additional financial statement required by this Order;”.

2.  For article 6 (income and expenditure account), there shall be substituted–

“Income and expenditure account

6.— (1) The income and expenditure account shall show the following information–

(a) as income–

(i) rents (excluding service charges) receivable after deducting rates (including domestic water rates) recoverable from tenants and losses arising from vacant accommodation and bad debts;

(ii) service charges receivable;

(iii) grants and subsidies receivable from the Secretary of State or a public authority (distinguishing between payments for acquisition and development of housing accommodation and those for projects where completion has become impossible but excluding grant receivable under section 62 of the 1985 Act);

(iv) interest and dividends from investments;

(v) net surpluses from sales of property (including leases granted at a premium);

(vi) all other income;

(b) as expenditure–

(i) management expenses;

(ii) the costs of repairs and maintenance, including provision for future works;

(iii) service costs, showing separately those relating to hostels and those relating to other housing accommodation;

(iv) interest on loans attributable to housing land;

(v) depreciation equal to repayment of loan principal;

(vi) other depreciation;

(vii) amounts transferred to the Grant Redemption Fund;

(viii) administrative costs of acquiring and developing housing accommodation;

(ix) cost of housing projects where completion has become impossible;

(x) all other expenditure.

(2) The income and expenditure account shall also show–

(a) the gross surplus or deficit for the period of account, ascertained by deducting expenditure from income, but before deducting the tax or crediting the grant referred to below;

(b) the amount charged to revenue for corporation tax and income tax, together with grant receivable under section 62 of the 1985 Act;

(c) the overall surplus or deficit for the period of account, after deducting the tax and crediting the grant referred to in (b) above;

(d) amounts transferred to or withdrawn from reserves.

(3) All amounts shown in the income and expenditure account for the period of account shall be accompanied by the corresponding amounts for the preceding period (if any).”

3.  Article 7 (statement of source and application of funds) shall be omitted.

4.  For article 8 (preparation of additional financial statements) there shall be substituted–

“Preparation of additional financial statement

8.   In addition to any other accounts which it is required to prepare apart from those required by virtue of this Order, the association shall prepare a statement of housing administration costs which shall be in the form set out in Schedule 5 to this Order.”

5.  For article 10(2) there shall be substituted–

“(2) The surpluses calculated in the manner determined by the Secretary of State under section 53(3) of the 1985 Act shall be shown as such in the income and expenditure account.”.

6.  In paragraph 4 of Part I of Schedule 1 (value of fixed assets in the balance sheet), the words “which is not a co-ownership society” in sub-paragraph (2), and sub-paragraph (4), shall be omitted.

7.  Schedules 2, 3, 4 and 6 shall be omitted.