Arhag Annual Report 2019/2020

1. PRINCIPAL ACCOUNTING POLICIES 1.1 General information Arhag Housing Association Limited is incorporated under the Co-operative and Community Benefit Societies Act 2014 in England and is a registered provider of social housing with the Regulator of Social Housing. A description of the nature of the Association’s operations and its principal activity is disclosed in the Report of the Board on page 28. The Association’s registered office is 82-90 Stratford High Street, London, E15 2NE. 1.2. Basis of preparation The Financial Statements of the Association are prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP) including FRS102 “The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland” (FRS 102) and the Housing SORP 2018 “Statement of Recommended Practice for Registered Social Housing Providers” and comply with the Accounting Direction for Private Registered Providers of Social Housing from February 2019. 1.3. Going concern The Association has sufficient financial resources based on forecasts and current expectations of future sector conditions. Consequently, the Board believes that the Association is well placed to manage its business risks successfully. Cashflow scenarios take possible pressures arising fromCovid-19 and Brexit into account. Covid-19 has presented challenges for Arhag. The Board has considered the impact of the pandemic and actions have been put in place to manage these risks and the Board consider these risks to be sufficiently mitigated. Arhag’s cash position has been reviewed for any cash shortfalls resulting fromCovid-19 pressures, and the Association is satisfied that the cashflows in place offer sufficient flexibility to reduce any risk and remain sustainable. The Board has a reasonable expectation that it will have adequate resources to continue in operational existence for the following twelve months. The Board therefore continues to adopt the going concern basis in preparing these Financial Statements. 1.4 Measurement convention The Financial Statements are prepared on the historical cost basis. 1.5 Social Housing Grant (“SHG”) Social Housing Grant (“SHG”), receivable from the Greater London Authority (GLA), is recognised using the accrual model in accordance with clause 24.5C of FRS 102. SHG is initially measured at the fair value of the asset received. It is initially recorded as a long-term liability (with the exception of the portion expected to be amortised to income in the forthcoming year, which is classified as a current liability) and classified as deferred grant income. Once the asset it is funding reaches practical completion, it is then released through the statement of comprehensive income as turnover over the estimated life (100 years) of the structure of housing properties. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020 38 Arhag