The National Audit Office qualified the Department of Culture, Media and Sport’s accounts due to discrepancies arising from the BBC’s valuations of non-current assets such as land and buildings.
In his Report into the 2011-12 DCMS accounts, the comptroller and auditor general Amyas Morse noted that the department had been put under pressure by the need to focus on the 2012 London Olympics. Its finance department had also been overwhelmed by trying to consolidate the accounts of 46 subsidiary bodies, some with their own subsidiaries, into the department’s overall accounts.
Even though the DCMS was granted an extension to prepare the accounts, it still failed to pass muster.
Museums and galleries apply the Charities statement of recognised practice (SORP), Lottery distributing bodies report under a Treasury direction and the BBC applies international financial reporting standards (IFRS), the report noted.
It was the BBC’s use of IFRS that led to the qualification. International GAAP permits tangible non-current assets such as land, pland and buildings including Broadcasting House (pictured above) to be recorded on at depreciated historic cost, which is how the BBC accounts were prepared.
About John Stokdyk
John Stokdyk is the global editor of AccountingWEB UK and AccountingWEB.com.