Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Annex 4


  The Merger Reserve (Note 19 to Annual Accounts for 1999-2000) represents the "assets" transferred to the merged body (The Countryside Agency) from the Rural Development Commission (RDC) since, technically, although named the Countryside Agency, as a legal entity the new body was a continuation in accounting terms of the Countryside Commission. Consequently, the assets transferred "in" from the RDC needed to be explicitly stated in the account.

  In essence, this brings onto the books of the new merged body the value in the business taken on from the RDC as part of the merger. For example, under Note 10 to the account, you will find a figure of £3.1 million under fixed assets (freehold buildings) for the transfer of the RDC's head office building in Salisbury (sold during financial year 2000-01). This forms the material part of the Fixed Assets figure (£3.138 million) shown in the breakdown of Note 19 (Merger Reserve).

  Merger Reserve will appear again in the audited accounts for 2000-01 which are now signed off. But from 2001-02, steps will probably be taken, to absorb this information in to main account because the Agency will have been trading for over two years since merger.

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