Plan Worldwide Annual Review and Combined Financial ...
Plan Worldwide Annual Review and Combined Financial ...
Plan Worldwide Annual Review and Combined Financial ...
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pension plans, any cumulative actuarial gains/losses that exceed 10% of the greater of the pension obligation or the fair value of the plan<br />
assets are spread over the expected average remaining working lives of employees participating in the plan. Past service costs/benefits are<br />
spread over the average period until the amended benefits become vested. Any change in the accrual for defined benefit pension plans is<br />
charged to the combined income statement.<br />
A number of <strong>Plan</strong> entities maintain defined contribution pension plans. The amount charged in the combined income statement in respect of<br />
such plans comprises the contributions payable by <strong>Plan</strong> in respect of the year.<br />
n. Foreign exchange accounting<br />
Transactions in foreign currencies are recorded at the rate of exchange ruling on the date of the transaction or at average contracted rates.<br />
Monetary assets <strong>and</strong> liabilities denominated in foreign currencies are translated at the year end exchange rates. Exchange differences arising<br />
are included in the combined income statement. The income <strong>and</strong> expenditure of NOs <strong>and</strong> <strong>Plan</strong> Ltd are translated at weighted average monthly<br />
exchange rates. The assets <strong>and</strong> liabilities of these entities are translated into Euros at year end exchange rates. The translation differences<br />
arising are included in the combined statement of comprehensive income.<br />
o. Hedging transactions<br />
PI Inc enters into forward foreign exchange contracts to hedge certain of its exposures to exchange rate movements on forecasted expenditure<br />
in currencies other than the Euro <strong>and</strong> Sterling. Unrealised gains or losses on forward foreign exchange contracts are recognised in income<br />
<strong>and</strong> expenditure.<br />
p. Taxation<br />
As a registered Not for Profit Corporation, PI Inc has no liability for corporation taxation. PI Inc’s subsidiary <strong>Plan</strong> Ltd is liable to UK taxation<br />
but donates all taxable profits to <strong>Plan</strong> International (UK) under a deed of covenant.<br />
q. Accounting estimates <strong>and</strong> judgements<br />
The preparation of the combined financial statements requires the use of estimates <strong>and</strong> judgements in determining the reported amounts<br />
of assets, liabilities, income <strong>and</strong> expenditure <strong>and</strong> the related disclosures. These estimates <strong>and</strong> judgements are based on assumptions that<br />
are considered reasonable in the circumstances, having regard to historical experience. Actual results may differ from these estimates.<br />
Certain accounting policies have been identified as involving particularly complex or subjective judgements or estimates, as follows:<br />
i) Income recognition - income is recognised when unconditional entitlement has been demonstrated. In some situations, for example in<br />
relation to contributions designated for specific purposes by the donor <strong>and</strong> income from legacies, judgement is involved in assessing<br />
when <strong>Plan</strong> becomes unconditionally entitled to receive the income.<br />
ii) Expenditure recognition - <strong>Plan</strong> may use third party organisations, such as communities in programme countries <strong>and</strong> fellow NGOs, to fulfil<br />
its aims. Funds spent through such third parties are recognised as expenditure at the earlier of when cash is paid or when an irrevocable<br />
commitment is made to pay. Judgement can be required in determining whether the commitments provided to these organisations are<br />
irrevocable.<br />
iii) Expenditure allocation - expenditure is analysed between certain programme groupings (called programme areas), as set out in note 3 to<br />
the combined financial statements. Judgement is sometimes needed in allocating expenditure, for example where a project covers more<br />
than one programme area.<br />
iv) Termination benefits - in many of the countries in which <strong>Plan</strong> operates, employees have an unconditional legal entitlement to termination<br />
benefits, either under local statute or their employment contract, regardless of the reason for leaving. Estimation is required in quantifying<br />
the obligation arising from these entitlements.<br />
<strong>Plan</strong> International <strong>Worldwide</strong> <strong>Combined</strong> <strong>Financial</strong> Statements for the year ended 30 June 2012<br />
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