Notes to the consolidated financial statements continued For the year ended 30 June 2025
4. Material accounting policies continued
4(e) Cash and cash equivalents Cash comprises cash in hand and call deposits held with banks. Cash equivalents comprise short-term, highly liquid investments that are subject to an insignificant risk of change in value and with a maturity of less than three months from the date of acquisition. Cash and cash equivalents are classified at amortised cost, as the business model of these assets is to hold to collect contractual cash flows, which consist solely of payments of principal and interest. They are initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate (“EIR”) method. 4(f) Share-based payments The Group operates a number of share incentive plans for its employees. These involve an award of shares or options in the Group (share-based payments). The fair value of the services received is measured by reference to the fair value of the shares or share options on the grant date. Fair value is measured using the Black–Scholes model. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest. At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in the consolidated statement of comprehensive income, such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to reserves. 4(g) Segmental reporting The Group determines and presents operating segments based on the information that is provided internally to the Group Board of Directors, which is the Group’s chief operating decision maker. 4(h) Fiduciary activities The Group commonly acts as trustee and in other fiduciary capacities that result in the holding or placing of assets on behalf of individuals, trusts, retirement benefit plans and other institutions. These assets and income arising thereon are excluded from these financial statements, as they are not assets of the Group. The Group holds money on behalf of some clients in accordance with the client money rules of the Financial Conduct Authority (“FCA”). Such monies and the corresponding liability to clients are not included within the consolidated statement of financial position as the Group is not beneficially entitled thereto. 4(i) Property, plant and equipment All property, plant and equipment is included in the consolidated statement of financial position at historical cost less accumulated depreciation and impairment. Costs include the original purchase cost of the asset and the costs attributable to bringing the asset into a working condition for its intended use.
4(d) Revenue Investment management fees
Revenue from investment management services is recognised over time as the services are provided. Fees are typically billed monthly or quarterly in arrears and are calculated based on a percentage of the portfolio value, either daily or at the billing date, depending on the underlying product. The performance obligation is satisfied continuously over the service period, and revenue is recognised accordingly. Revenue from investment management fees is only recognised as the performance obligation is satisfied. Amounts are presented net of any rebates or discounts provided to clients. Fund management fees Revenue from fund management services provided to open-ended investment companies (“OEICs”) is recognised over time as the services are provided. Fees are billed monthly in arrears and are calculated daily based on a fixed percentage of each fund’s net asset value. As such, fund management fees include variable consideration but there is no significant estimation or level of judgement involved. The performance obligation is satisfied continuously throughout the reporting period, and revenue is recognised accordingly. Amounts are presented net of any rebates or discounts provided to investors. Financial planning Financial planning income relates to fees for the provision of financial advice. Fees are charged to clients either using an hourly rate, by a fixed fee arrangement, or by a fund-based arrangement whereby fees are calculated based on a percentage of the value of the portfolio at the billing date. All fees are recognised over the period the service is provided. Transactional income and foreign exchange trading Transactional income is earned through dealing and administration charges levied on trades at the time a deal is placed for a client. Fees are calculated based on a percentage of the individual trade value or a flat charge per trade. Revenue is recognised at the point of the trade being placed. Foreign exchange trading fees are charged on client trades placed in non-base currencies, which therefore require a foreign currency exchange to action the trade. Revenue is recognised at the point of the trade being placed. Interest income Interest income on client money is the revenue earned on uninvested cash deposits held by clients. The amount recognised correlates with fluctuations in underlying interest rates and is recognised over time, based on balances held in investment accounts under administration.
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Brooks Macdonald Group plc Annual Report and Accounts 2025
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