SCOTTISH ENTERPRISE ANNUAL REPORT AND ACCOUNTS 2026
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Statement of Accounting Policies
is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax interest rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.
20. Contingent Liabilities
A contingent liability is a possible liability whose existence will only be confirmed by uncertain future events that are not wholly under the control of Scottish Enterprise. A contingent liability is disclosed in the notes to the accounts unless the prospect of having to settle such a liability in the future should its existence be confirmed is considered by Scottish Enterprise to be remote. If it is probable that Scottish Enterprise will be required to settle the liability then a provision is recognised in the Statement of Financial Position, as noted above.
21. Critical Accounting Estimates and Judgements
The preparation of the accounts in conformity with IFRS requires the Board and Accountable Officer to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. With the exception of the Retirement benefit scheme, sensitivity analysis has not been disclosed where management considers that reasonably possible changes in key assumptions would not result in a material impact on the financial statements, or where the inherent estimation uncertainty cannot be reliably quantified on a discrete basis.
Information about critical judgements in applying accounting policies that have the most significant effects on the amounts recognised in the accounts is as follows: