§ Tom BrakeTo ask the Secretary of State for Transport, Local Government and the Regions what(a) research, (b) consultation and (c) discussions his Department has carried out since 1997 on the legal definition and status of asset transfers. [38976]
§ Dr. WhiteheadAssets are defined in the Accounting Standards Board's Financial Reporting Standard (FRS) 5 as "rights or other access to future economic benefits controlled by an entity as a result of past transactions or events". Future economic benefits, in this context, means that the asset will contribute in some way to the provision of services or other outputs by Departments. Control, in this context, means the ability to obtain those benefits in fulfilment of aims and objectives of the entity and to restrict the access of others.
In accounting for asset transfers we follow the guidance of HM Treasury's "Resource Accounting Manual" (TRAM) and "Government Accounting". TRAM states at paragraph 3.2.36 that "Where tangible fixed assets are transferred between Government Departments, other than in connection with either a transfer of functions from one Department to another or a merger of Departments, the transfer price should be calculated in accordance with an assessment of the fair values on an equivalent basis to that required by FRS 7 for the attribution of fair values to tangible fixed assets acquired on a business combination". Government Accounting, at paragraph 24.4.2, states that: "Transfers of assets (including assignments of leases) at less than full market value should be accounted for as gifts. The value of the gift will be the difference between the open market value and the price at which it is transferred".
Our accounting actions are based upon the decisions and requests of the asset owners upon whom fall the legal responsibilities of asset management.