18 October 2017 
Matt Sisson, Projects and Membership Manager
In case you missed it in last week’s FRG newsletter, the Financial Reporting Group has updated the definition of EBITDA for HEIs to address the impact of FRS 102 more fully. BUFDG previously issued a definition of EBITDA in May 2016 which took account of FRS 102 and the withdrawal of FRS3 and FRS17, but this updated definition takes account of further nuances as a result of the adoption of FRS 102.
Remember that HEFCE has now adopted the adjusted net cashflow metric (ANOC), jointly developed by the BUFDG Metrics group, which establishes a revised approach to measuring the financial commitment threshold. Because there is currently no historical track record with the new metric, with BUFDG’s agreement, HEFCE have decided to continue to collect EBITDA alongside the new metric for the time being. Some HEIs also use EBITDA for their own internal purposes and some may have banking covenants based on EBITDA. The updated definition can be viewed here.
