For the year to 31 March 2012, gross operating surplus was £20.15m, compared to a target of £15.83m. Operating income grew by 9% to £143.70m. Total comprehensive income amounted to £0.41m and total assets now stand at £132.25m.
We continued to see growth in our member and student numbers which contributed to increased income from fees and subscriptions. Income from qualifications and examinations also grew in response to the increase in student numbers and the number of entries for the examinations. There was also strong growth in income from publications, through advertising in our magazines and web pages, royalties and mailing services.
Gross operating surplus - £4.32m higher than target
ACCA measures its financial performance on a gross operating surplus basis, prior to charging strategic development expenditure and the effects of the pension curtailment. As mentioned above, performance for the year amounted to £20.15m compared to a target of £15.83m - a £4.32m outperformance. An ongoing focus on cost consciousness and value for money improved our margins, and this, combined with improvements in the alignment of operating expenditure with strategic priorities and outcomes, resulted in the outperformance.
Pension curtailment gains
During the year, ACCA reached the conclusion of a review of its defined benefit pension schemes in the UK and Ireland. Both schemes will close to future accrual on 31 July 2013 and a number of changes were made to the schemes at 31 July 2011 which resulted in a curtailment of both schemes at that date. Accounting standards require the effects of the curtailment to be included in arriving at operating surplus. For ACCA, the effect was a gain of £7.3m, reflecting the reduction in the pension liabilities caused by the changes made to the schemes.
Total comprehensive income
Council has a long-term target to build the accumulated fund to 60 days of operating expenditure by generating an operating surplus each year and taking investment income and other comprehensive income to reserves. Other comprehensive income includes currency translation differences and unrealised gains on our investment portfolio and land and buildings. The properties which we own were revalued on 31 March 2012, adding £1.75m to reserves.
The change in accounting policy for pensions requires us to recognise pensions gains or losses in total comprehensive income. As demonstrated in the five year summary, the value of these gains and losses tends to be very volatile due to the dependency on corporate bond yields. In addition, the pension fund assets are held in both equities and bonds, so the value of assets can move differently from the value of the related liabilities, contributing to the volatility.
Total comprehensive income for the year amounted to £0.41m. A strong underlying operational performance combined with investment income and unrealised investment and property gains were offset by the net impact of pension losses and the curtailment of the pension schemes.
The growth in total assets is primarily due to the amount of cash received from students entering for the June 2012 examinations in the early entry period, which closed on 8 March. The majority of that cash has been invested in certificates of deposit.
The main growth in fixed assets has been the triennial revaluation of the owned properties, and the capitalisation of equipment and related resource costs to deliver the necessary IT infrastructure to support our move to delivery of key transactional services on-line.
Total reserves and liabilities
The main growth in reserves and liabilities has been in deferred income, which are payments received in advance for fees and subscriptions and examination entries.
The increase in the pension deficit caused by actuarial losses has been offset by the positive impact of the pension curtailment, which reduced the liabilities in the schemes, and the effect of contributions paid into the schemes.
Download ACCA's detailed financial statements.