Annual Report and Accounts 2007/8 - Cancer Research UK

28Notes to the Accounts (continued)1. Accounting policies (continued)Fixed assets and depreciationFixed assets are included at cost where that is greater than £2,500 for the Charity and its charitable subsidiaries and £500for its trading subsidiaries, except that batches of items individually below those thresholds are capitalised if they form partof one project and together cost more than £50,000. Software is only capitalised where its cost exceeds £50,000.Thecosts of laboratory refurbishments are written off as they are incurred. Depreciation is provided so as to write off the costof fixed assets on a straight-line basis over their expected useful economic lives, as follows:Freehold landNot depreciatedFreehold buildings25 yearsLeasehold buildings and research facilities25 years, or lease period if shorterPlant and equipment4–5 yearsShop fixtures and fittings5 yearsComputer equipment and software3 yearsImpairment of fixed assetsFixed assets are subject to review for impairment when there is an indication of a reduction in their carrying value.Any impairment is recognised in the SOFA in the year in which it occurs.InvestmentsListed investments are stated at market value.They are revalued immediately prior to disposal: as a result, no gain or lossarises on sale. Unlisted investments are included at cost as an approximation to market value, unless there is specificevidence to the contrary. Subsidiary companies are valued at cost. Cash deposits intended to be held for the long termare shown under investments. All other cash balances are included as current assets.The SOFA includes unrealised gainsand losses arising from the revaluation of the investment portfolio in the year.Investment propertiesInvestment properties are included in the balance sheet at their estimated market value. Investment properties areformally revalued at least every five years by professional valuers and are reviewed annually to ensure that the mostrecent formal valuation is still reasonable. No depreciation is provided on investment properties, which represents adeparture from the Companies Act 1985 requirements.These properties are held for investment and the Trusteesconsider that this policy is necessary to give a true and fair view in accordance with accounting standards.GoodwillGoodwill is calculated as the difference between the cost of a consolidated entity and the aggregate of the fair values ofthat entity’s assets and liabilities. Negative goodwill arises when the aggregate fair values of the consolidated entity’s assetsand liabilities exceed any acquisition cost. Negative goodwill is recognised in the SOFA in the periods in which the assetsare recovered. Negative goodwill arising from the acquisition of the Beatson institute for Cancer Research is amortised ona straight line basis over 10 years.StockStock purchased for sale and research consumables are valued at the lower of cost and net realisable value. Stock doesnot include the value of goods donated for sale in the Group’s charity shops.Short term depositsShort term deposits are current asset investments that are readily convertible into cash at or close to their carrying amount.