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Treatment of church-owned land in MAT/SAT accounts

Fri 01 Sep 2017

There has been a cloud of confusion connected to the treatment of church-owned land on academy balance sheets. Happily, the Academies Accounts Direction 2016-2017 published June 2017 (pages 117-118) now clarifies matters.

The Direction states as follows:

  • If a school site is made available to a MAT or SAT by the site trustees under a 125 year lease, the leasehold interest amounts to an asset of the academy trust and should appear on the balance sheet as such;
  • If the church owned land is being occupied under a Church Supplemental Agreement this should NOT be treated as a fixed asset in the accounts as it is no more than a bare permission to occupy land. The land should be treated as a notional donation for a rolling two year period.

Auditors may need to be reminded of this if any alternative approach is suggested. Further guidance if needed can be obtained from Christine Fischer at the Catholic Education Service or Rowan Ferguson at the Church of England Education Office.

We can also assist if there is any confusion as to on what basis the academy trust occupies land.

DfE online data collection tool

Please note that the workbook that supports the collection tool and some guidance “Land and Buildings Collection Tool, Completion Guidance for Academy Trusts” (published 10 July) is not suitable for completion for church academies. We recommend that you don’t submit these “workbooks” at this stage. Instead please wait for a more suitable document to be issued.

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