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#1 Posted : 11/03/2019
Joined: 24/02/2018(UTC)
Posts: 1

I wonder has anyone else had issues with S.106 receipts. We have a potential issue in Education that changing rules in planning mean we have to name schools at the time of an application that subsequently the S.106 receipts aren't required to be spent on.

We haven't faced it yet but we are concerned we may end up repaying receipts.

Similarly where a major development is happening and the receipts are due over a number of years (uncertain) but school expansion is taking place now how can we use future potential receipts to fund this?

Be grateful for any responses!
#2 Posted : 13/03/2019
Joined: 24/02/2018(UTC)
Posts: 77

Was thanked: 4 time(s) in 3 post(s)
Not aware of anything re schools but our s106 agreements have a condition included in them that if unspent after 5 years the amount is repayable. I don't think we have yet repaid anything but it means that we treat the receipts as conditional and only recognise them as income at the point they are in effect being used to fund the capital expenditure.

Also we only use s106 monies when they have actually been paid. Similar as with capital receipts - if a property is sold but the receipt is deferred, the receipt is recognised as a deferred capital receipt and not available for financing capital expenditure until it is actually received (per 2003 Act definition of when a capital receipt is to be regarded as received - when it becomes payable). So it is doubtful that you could use such future receipts to fund the expenditure.

Incidentally do you raise accruals for s106 monies due but not yet paid?
And if so - are you impairing them (particularly re IFRS9)?
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