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Report

Annual report and Accounts 2019 to 2020

Making gambling fairer and safer

  1. Contents
  2. Notes to the accounts
  3. Right-of-use assets

Right-of-use assets

Following the adoption of IFRS 16 in 2019-20 financial accounts, the Commission has categorised all leases are on recognised as lease liabilities, with the exception of those leases which are exempt either by having less than 12 months to run from 31st March 2020 or are considered low value (less than £5,000).

The finance lease is recognised as an asset and a corresponding lease liability at the net present value (NPV) of future lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability.

Costs in the statement of comprehensive net expenditure have increased by £255k net of operating lease rental as a result of adopting IFRS 16 during 2019-20.

A discount rate of 1.99% has been applied in the calcuations of interest on lease liabilities. As at 31st March 2020 the Commission was committed to making the following payments in respect of finance leases:

a) Right-of-use asset

Victoria Square House Land and Buildings
£'000s
Bloomsbury Street Land and Buildings
£'000s
Plant & equipment
£'000s
Total
£'000s
Cost/valuation
At 1 April 2019 1,112 611 6 1,729
Additions to right-of-use assets 3,981 - - 3,981
Depreciation charge for the year (736) (85) 2 (823)
Balance as at 31 March 2020 4,357 526 4 4,887
No later than one year 736 204 2 942
Later than one year and not later than five years 3,621 322 2 3,945
Later than five years - - - -
Balance as at 31 March 2020 4,357 526 4 4,887

b) b) Lease liability

Victoria Square House Land and Buildings
£'000s
Bloomsbury Street Land and Buildings
£'000s
Plant & equipment
£'000s
Total
£'000s
2019 – Leases under IFRS 16
Additions to lease liabilities†† (1,470) (611) (6) (2,078)
Interest on lease liabilites @ 1.99%††† (3,981) - - (3,981)
Cash payment†††† 973 27 2 1,002
Balance as at 31 March 2020 (4,587) (589) (4) (5,180)
Total future lease payments under leases are given in the table below for each of the following periods:
No later than one year (518) (262) (2) (782)
Later than one year and not later than five years (4,069) (327) (2) (4,398)
Later than five years - - - -
Balance as at 31 March 2020 (4,587) (589) (4) (5,180)

Victoria Square House: Following a successful application to the Government Property Unit, the Commission signed a lease for its existing premises in central Birmingham. The lease was signed in May 2015. The lease is for a period of 10 years (with a 5 year break clause) and commenced with effect from February 2016 when the previous lease expired.

As at 31 March 2020, the lease at Victoria Square House will continue for an additional 5 years to February 2026.

Bloomsbury Street: As part of the National Lottery Competition, the Commission have entered into an Intra- UK government agreement for premises in Bloomsbury Street London. The lease is currently unsigned as at 31 March 2020. The lease is for a period of 3 years and commenced with effect from 8 November 2019.

References

Right-of-use asset value for Victoria Square House as at 1 April 2019 includes an adjustment of £358k relating to a brought forward deferred rent release provision. The Commission received a rent-free period during 2015/2016, during this time rental charges were accrued and the cost benefit is being released over the life of the lease.

†† Lease at Victoria Square House will continue for an additional 5 years to February 2026

††† Interest on lease liabilities – Finance Cost - amounts recognised in SoCNE.

†††† Amount recognised in the statement of cash flow – total cash outflow for leases.

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Capital commitments
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Commitments under operating leases
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