1. Externally Funded Studentships
Philippa Woods
HOFFRA

2. RCUK Funded studentships
Issue 1: How should the income be recognised?
RCUK bodies award funds to the University in return for the provision of postgraduate study over a set period. Thus there is an implied level of service to be delivered over time and as such RCUK studentships contain performance related conditions.
As such studentship income will be recognised in line with the delivery of the provision of the service (postgraduate study). The grant spend on the provision of postgraduate study is the best indicator of the delivery of the provision postgraduate study.
Issue 2: What does this mean in practice?
We will recognise the income in line with the expenditure (as we do now) so there is no change to this process.

3. CASE/Industrial Awards
Issue 1: How should the income be recognised?
Even though the IP is not theirs, and it is not the student that is paying, the view is that the sponsor is perceiving that they are getting something in return. Often the student is a member of their staff, or a possible future member of staff, or they are just extending the skills pool in their area which will bring them future benefit. Therefore these studentships will be classed a an exchange transaction.
Issue 2: What does this mean in practice?
We will recognise the income in line with the expenditure (as we do now) so there is no change to this process.

4. Donation funded studentships
Issue 1: How should the income be recognised?
Under the new SORP we will recognise all donations under £50,000 as unrestricted and the income will be recognised on receipt.
For donations over £50,000 the gift agreement will be checked by the HOFF in that area and a decision will be made as to whether there are restrictions on the use of the funds.
As there is no contractual arrangement to repay funds not spent these funds would not fall into the performance condition category.
Issue 2: What does this mean in practice?
All unrestricted donations for studentships will be recognised on receipt of the monies and will not be matched to the associated expenditure.
If a restriction is identified in the gift agreement the income would be recognised on receipt as restricted income.

5. Month end income recognition process
Non Exchange Transaction Label (NETL) to be populated locally
pre August upload template
Post August done locally as new activity codes opened
Heads of School Finance are responsible for activity code ‘flagging’, by end of July 2015
As NETL is such an important driver for income recognition, it should be reviewed monthly
Circulated monthly for review
Available to be run from report at any time
Jills team will distribute a template for us to populate so enable the fast update of the NETL flexfield on a large scale
Flexfields - mention how this is not currently a robust way of analysing data – this MUST change
The pink categories are very simple – it represents income where no PRCs exist but restrictions do. This means that no matter the classification between restricted and not restricted, the income will not normally be deferred.
To simplify,
Anything <£50k will be classed as unrestricted income as it is not material (and is in line with the policy for donations and endowments),
Anything >£50k with restrictions will be categorised as Restricted income and we have to take more care with these codes as these income streams are reported through restricted reserves – not unrestricted reserves. We will have to track any movement on restricted reserves – and move to unrestricted reserves as the restrictions are met - so we want to avoid these where possible.
For the remainder of this presentation, I am looking at the Green label items
These represent any journals for income recognition that will not be performed centrally:
PRC – Not matched
Other – not matched
These income recognition adjustments will be done locally as they are not matched to expenditure
EXAMPLE – Contracts with milestones, Consultancy work?

6. Month end income recognition process
‘Restricted’ and ‘Unrestricted’
The ‘further text’ field for these activity codes should explain what, if any, the restrictions on the use of the income are.
Jill's team will distribute a template for us to populate so enable the fast update of the NETL flexfield on a large scale
Flex fields - mention how this is not currently a robust way of analysing data – this MUST change

7. Housekeeping and data cleanse
Before 31st July
Populate ‘NETL’ flag
Populate ‘further text’ flag for ‘not matched’
Ongoing ‘Housekeeping’ reviews
Codes coded as ‘non matched’ for reasonableness
Codes coded as ‘non matched’ without supporting reasons in ‘further text’
Codes coded as ‘non matched’ which are being matched to expenditure

8. Questions?