ANNUAL REPORT 2017/18 31
NOTES TO THE FINANCIAL STATEMENTS
31 March 2018
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
2.1 Basis of preparation
(continued)
(c) Use of estimates and judgements
(continued)
Key sources of estimation uncertainty
The key assumptions concerning the future, and other
key sources of estimation uncertainty at the end of the
reporting period, that have a significant risk of causing a
material adjustment to the carrying amount of assets and
liabilities within the next financial year, are discussed below.
(a) Fair value estimation on other investments
The University holds other investments that are not traded
in an active market. The University has used the net asset
values provided by fundmanagers and fund administrators.
The carrying amount of these other investments at the
end of the reporting period was $229,947,000 (2017:
$102,973,000) (Note 11).
(b) Property, plant and equipment
The University reviews the residual values and useful
lives of property, plant and equipment at each reporting
date in accordance with the accounting policy in Note
2.9. The estimation of the residual values and useful
lives involves significant judgement. The net book value
of property, plant and equipment at 31 March 2018 is
$733,645,000 (2017: $745,702,000) (Note 14) and the
annual depreciation charge for the financial year ended
31 March 2018 is $36,532,000 (2017: $34,133,000) (Note
14). If the actual useful lives of the property, plant and
equipment are longer or shorter than the management’s
estimate, the University annual depreciation charge will
be decreased or increased accordingly.
(c) Provision for graduate output adjustment
Provision for graduate output adjustment relates to
the portion of the grants to be refunded to Ministry
of Education (“MOE”) in the event that the University
achieves fewer graduates than MOE’s output target. The
provision for graduate output adjustment is assessed by
the management on the estimated graduate output in
each year for the undergraduate degree programmes.
With effect from FY2018, MOE will move all MOE-
subsidised full-time undergraduate degree programme
at Singapore University of Technology and Design
(“SUTD”) that are currently funded on an output basis
to Enrolment Based Funding (“EBF”) model for new and
existing cohorts. Accordingly, the University has fully
reversed the provision for graduate output adjustment of
$3,046,391, resulting in a nil balance as disclosed in Note
10(i) and Note 16 to the financial statements.
2.2 Funds
(a) General fund
General fund comprise surpluses from operational
activities, commitments, planned expenditure and self-
financing activities. It also includes funds set aside for
specific purposes such as staff and student housing.
The use of the reserves generated from surpluses from
operational activities and those funds set aside for
specific purposes is subject to the approval of the Board
of Trustees.
Income and expenditure related to the general fund are
accounted for under the general fund in the income and
expenditure.
(b) Non-endowment fund
Donations and sponsorships from individuals and
external bodies which are to be put to use for specific
purposes specified by the donors are taken to non-
endowment fund in income and expenditure.
Income and expenditure relating to the fund are
accounted for under non-endowment fund in income
and expenditure.
(c) Endowment fund
Donations and government matching grants, which are
kept intact as capital, are directly taken to the endowment
fund in the year in which such donations are received
and government grants are granted.
Income and expenditure relating to the endowment
fund are accounted for under endowment fund in
income and expenditure.
2.3 Revenue recognition
Revenue comprises the fair value of the consideration
received or receivable for the rendering of services, net
of goods and services tax in the ordinary course of the
University’s activities. Revenue is recognised as follows:
(a) Tuition and other fees
Tuition and other fees are recognised in the period in
which the services are rendered.
