Component Accounting: A Case Study At Bromford Group

This paper is a study of component accounting (CA) with reference to registered social housing providers – a contemporary topic of developing issue and importance to the sec-tor. The importance of the topic has been given fresh impetus by the relatively new require-ments in The Statement of Recommended Practice (SORP) 2010 for housing – which sets an effective date for adopting CA for accounting periods commencing on or after 1st April 2011. The paper is based on primary research at Bromford Group, a registered social hous-ing provider. It provides a sector overview and then critically examines theory and specifi-cally the practical difficulty in implementing CA at Bromford Group as a case study. A focus group provided the means for data collection and sharing ideas around the concept/issue. Key research debate focused around how to account for components covering component identification, life cycles, cost identification and depreciation and net book value calcula-tions. Further research questions were centred on social housing grant, valuations and prior period adjustments. It was recognised early on at Bromford that a pragmatic practical approach to CA was required and this led to an innovative solution. The paper concludes with a number of gaps in knowledge that could be further researched if CA techniques are to be become more efficient and effective.