Page 52 - Housing Solutions Annual Report

Notes to the Financial Statements

For the year ended 31 March 2019

1.0 Legal Status
The Association is registered in England under the Co-Operative and Community Benefit Societies Act
2014 and is registered with the Regulator of Social Housing as a housing provider.

2.0 Accounting policies
2.1 Basis of accounting
The financial statements of the Group and Association are prepared in accordance with UK Generally
Accepted Accounting Practice (UK GAAP) including Financial Reporting Standard 102 (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 2019.

The financial statements are compliant with FRS 102.
The financial statements are presented in Sterling (£).
2.2 Going concern
The board reviewed Housing Solutions forecasts for the period to March 2021 in March 2020 and
were content that these plans were affordable and that the accounts should be prepared on a going
concern basis.
However, the impact of the COVID-19 outbreak and its financial effect has meant that the Executive
Team and Board have been reviewing financial plans for the next three years to ensure Housing
Solutions can remain a going concern. We have modelled a number of scenarios based on current
estimates of rent collection, property sales and maintenance spend. Board will continue to review plans
with the Executive Team to make the necessary changes to continue to work with our customers and
stakeholders to deliver exceptional services in a friendly, solution-focused way.
The Government’s decisions on social distancing have had a significant effect on our financial situation
and resulted in an estimated £1m reduction in operating surplus for 2021. This will not cause Housing
Solutions to breach our loan covenants. This is across all areas of income, with much of this from
income collection and sales as foresaw difficulties for residents to pay their rent and for homebuyers
to complete mortgage transactions, as well as an increase in operating costs offset by some delays in
planned maintenance.
The length of the COVID-19 outbreak and the measures taken by the Government to contain this are not
known and outside of our control but we have put processes in place to manage cashflow on a monthly
basis and review financial stability as matters progress.
Given the strength of the balance sheet and availability and liquidity of undrawn loan facilities, totalling
around £37m, Board believe that, while uncertainty exists, this does not pose a material uncertainty that
would cast doubt on Housing Solutions ability to continue as a going concern. Board therefore consider
it appropriate for the accounts to be prepared on a going concern basis.
2.3 Significant judgements and estimates
Preparation of the financial statements requires management to make significant judgements and
estimates. The items in the financial statements where these judgments and estimates have been made
include:
Estimation uncertainty

Information about estimates and assumptions that have the most significant effect on recognition
and measurement of assets, liabilities, income and expenses is provided below. Actual results may be
substantially different.

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