What is meant in the financial strategy presentation by non core activities?
• These are grants received and extra gains and losses on disposals. The non core activities distort the results since the Government insists that Universities currently recognise all Government grants, whether for revenue/operational items or capital through the Profit and Loss Account in the year that it is received. This is not in line with normally accepted accounting principles, which follow the matching principle, with revenue for capital items being taken straight to the Balance Sheet. Any capital grants therefore inflate revenue numbers in the year of receipt and it may be many years before the expense is recognised via the Profit and Loss Account through depreciation. • It is therefore important that the core activities achieve the required margin each year rather than relying on this variable and discretionary revenue.
