Hartpury Annual Report July 2025

Hartpury University Annual Report and Financial Statements > 2024/2025

Notes to the Financial Statements (continued) Year Ended 31 July 2025

3. Provision for doubtful debts: The provision for doubtful debts is based on an estimate of the expected recoverability of outstanding debts. Assumptions are made based on the level of debtors that have historically defaulted, together with current economic conditions. The provision reflects the current circumstances of the customer, the age profile of the debt, and the nature of the amount due. 4. Lease classification: The Institution determines whether leases entered into as either a lessor or lessee are operating or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have transferred from the lessor to the lessee on a lease-by-lease basis. 5. Impairment of tangible assets: Management assesses whether there are indicators of impairment of the Group’s tangible assets. Factors considered include the economic viability and expected future financial performance of the asset and, where it forms part of a larger cash-generating unit, the viability and expected future performance of that unit. 6. Local Government Pension Scheme (LGPS) defined benefit liability: The present value of the Local Government Pension Scheme defined benefit liability depends on a number of factors determined on an actuarial basis using a range of assumptions. The assumptions used in determining net pension costs include the discount rate. Changes in these assumptions, which are disclosed in Note 20, will impact the carrying amount of the pension liability. In valuing the pension liability at 31 July 2025, the actuary has used a roll-forward approach based on the latest full actuarial valuation performed at 31 March 2023. Any differences between the results derived from the roll-forward approach and those from a full actuarial valuation would affect the carrying amount of the pension liability. Where the present value of the defined benefit obligation at the reporting date is less than the fair value of plan assets, the scheme has a notional surplus. As management do not consider that the Institution will be able to recover the surplus either through reduced future contributions or through refunds from the plan, the surplus has not been recognised in these financial statements in accordance with paragraph 28.22 of FRS 102.

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