Page 49 - RFU Annual Report 2018

4
FINANCIAL STATEMENTS

7

INDEPENDENT AUDITOR’S sufficient and appropriate to provide a We have therefore identified revenue
REPORT TO THE MEMBERS OF basis for our opinion. recognition for multi-year broadcasting
and sponsorship contracts as a key audit
THE RUGBY FOOTBALL UNION Conclusions relating to matter.
going concern
Opinion Our response:
We have nothing to report in respect
We have audited the financial of the following matters in relation to Our audit procedures over revenue
statements of the Rugby Football Union which the ISAs (UK) require us to report recognition for multi-year broadcasting
(the ‘Parent entity’) and its subsidiaries to you where: and sponsorship contracts included, but
(the ‘Group’) for the year ended 30 were not limited to:
June 2018 which comprise the Group the directors’ use of the going concern
and Parent Profit and Loss Account, basis of accounting in the preparation Obtaining the underlying contracts
the Group and Parent Statement of of the financial statements is not for all material contracts and a sample
Comprehensive Income, the Group appropriate; or of other contracts and assessing the
and Parent Balance Sheets, the Group key terms thereof;
and Parent Statement of Changes in the directors have not disclosed in the
Equity, the Group Cash Flow Statement financial statements any identified Assessing whether revenue
and notes to the financial statements, material uncertainties that may cast recognised in the period is
including a summary of significant significant doubt about the Group’s or appropriate in the context of the key
accounting policies. The financial the Parent entity’s ability to continue terms of the contracts and any other
reporting framework that has been to adopt the going concern basis of associated supporting documentation.
applied in their preparation is applicable accounting for a period of at least
law and United Kingdom Accounting twelve months from the date when the Our findings:
Standards, including FRS 102 “The financial statements are authorised
Financial Reporting Standard applicable for issue. On the basis of our audit procedures,
in the UK and Republic of Ireland” we have not identified any evidence
(United Kingdom Generally Accepted Key audit matters of material misstatement in revenue
Accounting Practice). recognised in respect of multi-year
Key audit matters are those matters broadcasting and sponsorship contracts.
In our opinion, the financial statements: that, in our professional judgement,
were of most significance in our audit of Accounting for complex contractual
give a true and fair view of the state of the financial statements of the current arrangements
the Group’s and of the Parent entity’s period and include the most significant
affairs as at 30 June 2018 and of the assessed risks of material misstatement Key audit matter
Group’s and Parent entity’s loss for the (whether or not due to fraud) we
year then ended; identified, including those which had The Rugby Football Union enters
the greatest effect on: the overall audit into contractual arrangements with a
have been properly prepared in strategy, the allocation of resources in diverse range of suppliers and business
accordance with United Kingdom the audit; and directing the efforts of the
Generally Accepted Accounting engagement team. partners. By nature, such contractual
arrangements can be complex and the
Practice; and terms of the agreement can require the
These matters were addressed in the exercise of judgement in determining
have been prepared in accordance context of our audit of the financial
with the Co-operative and statements as a whole, and in forming the most appropriate accounting
Community Benefit Societies Act our opinion thereon, and we do not treatment. We have therefore identified
2014. provide a separate opinion on these accounting for complex contractual
arrangements as a key audit matter.
matters. These arrangements include:
Basis for opinion
Revenue recognition – multi-year The joint venture, Twickenham
We conducted our audit in accordance commercial contracts
with International Standards on Experience Limited (TEL),
Auditing (UK) (ISAs (UK)) and Key audit matter providing catering and hospitality at
applicable law. Twickenham stadium and in which
Compass Group has a 40% equity
The Groups’ accounting policy interest. Details of the changes to the
Our responsibilities under those for recognition of each significant
standards are further described in the component of revenue is set out in arrangements during the year are set
Auditor’s responsibilities for the audit of note 2 (d) on page 58 of the financial out in note 3 - Judgements in applying
the financial statements section of our statements. The application of the accounting policies and key sources
report. We are independent of the Rugby Group’s policy for recognition of of estimation uncertainty – RFU/
Compass agreement - 2018 on page 62.
Football Union in accordance with the revenue from multi-year commercial
ethical requirements that are relevant broadcasting and sponsorship contracts Under the revised arrangement, the
RFU is obliged to purchase Compass
to our audit of the financial statements requires the application of judgement
in the UK, including the FRC’s Ethical in determining the appropriate Group’s 40% interest for £95.5m on or
before 30 June 2028, and a liability
Standard and we have fulfilled our other proportion of revenue to recognize in
ethical responsibilities in accordance each accounting period covered by the for the discounted consideration has
been included at the year end. A
with these requirements. We believe that contract, in particular where the Group’s
the audit evidence we have obtained is obligations under those contracts vary separate reserve has been set up to
record the impact of transactions in
year on year. the equity of TEL; and Annual
Report
2018