II•
Jockey Club Racecourses Limited Notes to the financial statements Year ended 31 December 2021
2. Judgements in applying accounting policies and key sources of estimation uncertainty In preparing these financial statements, the directors have made the following judgements:
• Determine whether leases entered into by the company either as a lessor or a lessee are operating or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis. • Determine whether there are indicators of impairment of the company's tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and, where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit. Other key sources of estimation uncertainty • Tangible fixed assets (see note 12) Tangible fixed assets, other than land, are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as asset replacement and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. • Deferred tax (see note 19) Deferred tax assets are recognised for unused tax losses, unabsorbed capital allowances and other deductible timing differences to the extent that it is probable that taxable profits will be available against which the losses, capital allowances and other deductible timing differences can be utilised. Management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits. • Defined benefit pension scheme (see note 18) The cost of the defined benefit Tension plan is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and the long term nature of these plans, such estimates are subject to significant uncertainty. The discount rate is based on a yield curve derived from bonds in the ICE Bank of England Sterling AA Corporate Index and takes account of the duration of the liabilities and implied approximate shape of future cash flows. The mortality rate is based on publicly available mortality tables. Future salary increases and pension increases are based on expected future inflation rates.
3.
Analysis of turnover
2021
2020
£m
£m
Analysis by class of business Horse racing
106.4
127.1
Conference and events
10.5
5.1
111.5
137.6
Turnover arises wholly within the United Kingdom.
36§, 366
147
NT1/103
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