Notes to the Financial Statements

1. General Information and Accounting Policies

a. Company Limited by Guarantee

The Irish Museum of Modern Art was set up under the Companies Act 1963, (as replaced by the Companies Act 2014) with a head office at the Royal Hospital Kilmainham, Dublin 8. The Company, which was incorporated on the 18th April 1985 under the Companies Act 1963, is limited by guarantee and does not have a share capital.

b. Principal Activity

The principal business of the Company is the management and development of The Irish Museum of Modern Art at the Royal Hospital Kilmainham and the promotion of the Royal Hospital Kilmainham and its grounds as a major cultural and artistic centre accessible to the public. Irish Museum of Modern Art is a Public Benefit Entity.

c. Statement of Compliance

The financial statements of The Irish Museum of Modern Art for the year ended 31 December 2021 have been prepared in compliance with the applicable legislation and in accordance with FRS102, the financial reporting standard applicable in the UK and the Republic of Ireland issued by the Financial Reporting Council in the UK.

d. Basis of Preparation

The financial statements have been prepared under the historical cost convention, except for certain assets and liabilities that are measured at fair values as explained in the accounting policies below. The financial statements are in the form approved by the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media with the concurrence of the Minister for Public Expenditure and Reform, and have been prepared, where appropriate, in compliance with the requirements of the Companies Act 2014.
The following accounting policies have been applied consistently in dealing with the items which are considered material in relation to the Irish Museum of Modern Art’s financial statements.

Going Concern

The Covid-19 pandemic has had a detrimental impact on IMMA’s commercial revenue over the past two years. IMMA has offset the loss of revenue with operational savings and with some additional support from the Department. The Finance, Audit & Risk Committee continues to monitor developments with the Executive and remains focussed on the on-going risks to the Company’s business model. The Board and Executive, in consultation with the Department, have reviewed the company’s forecasts and projections, and are satisfied that the going concern basis is appropriate for the preparation of these Financial Statements.

Accounting Policies

The basis of accounting and significant accounting policies adopted by the Irish Museum of Modern Art are set out below. They have all been applied consistently throughout the year and for the preceding year.

e. Grants

Oireachtas Grants (Revenue)

Revenue is generally recognised on an accrual basis; one exception to this is in the case of Oireachtas Voted Grants which are recognised on a cash receipts basis.

Oireachtas Grants (Capital)

Grants allocated for the purpose of the acquisition of works of art are treated as being donated capital and are transferred to the Capital Account (Works of Art). Grants allocated for the purchase of tangible fixed assets are amortised over the life of the relevant fixed asset purchased. Capital Grants are recognised on an accruals basis.

Income From Commercial Activities

The income from the Commercial Activities of the Company is accounted for on an accruals basis and reported exclusive of Value Added Tax.

Sponsorship

Sponsorship income is credited to the Statement of Income and Expenditure and Retained Revenue Reserves in the year in which the applicable expenditure is incurred. Where expenditure has been deferred to a future period any income relevant to that expenditure will also be deferred.

Deferred Revenue

Revenue will be deferred where the activity to which the income relates is not scheduled to occur until a future accounting period.

f. Capital Account(Works of Art)

The Capital Account (Works of Art) represents the income allocated for the acquisition of works of art
and the value of works donated to the Company under Tax legislation.

g. Property, Plant & Equipment

Property, Plant & Equipment are shown at cost less accumulated depreciation, adjusted for any provision for impairment. Depreciation is charged on the straight-line basis at the annual rate set out below, so as to write off the assets, adjusted for estimated residual value over their expected useful life.

Furniture, Fittings & Equipment 25% per annum

Motor Vehicles 25% per annum

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of an age and in the condition expected at the end of its useful life.
If there is objective evidence of impairment to the value of an asset, an impairment loss is recognised in the Statement of Income and Expenditure and Retained Revenue Reserves in the year.

h. Heritage Assets (Works of Art)

All works of art recorded in the Statement of Financial Position are of an artistic nature and are maintained principally for their contribution to knowledge and culture. The Royal Hospital building and any other locations operated by IMMA are owned and maintained by the State and are not the property of the Company.

Disclosure:

i) The nature and scale of heritage assets held by IMMA.

The Irish Museum of Modern Art is home to the National Collection of modern and contemporary art,
with 4,400 works categorised by the following major headings:

• Graphic Art & Photography – refers to two-dimensional works on a flat surface such as prints, drawings and photography
• Paintings – application of paint onto a solid surface such as canvas, board or linen
• Sculpture –three-dimensional objects
• Installation – three-dimensional works that often are site specific and designed to transform the perception of a space. This often includes audio-visual works that transform a space
• New Media/other – including digital art, computer graphics, computer animation/other types of medium include tapestry, works with multiple media and IMMA’s archive Time-Based Media

The collection is firmly rooted in the present and important new works are added to the collection each year. Our collection of modern art is regularly enhanced by purchase, commission, donation or loan with a particular emphasis on work from the 1940s onwards.

ii) The policy for the acquisition, preservation, management and disposal of heritage assets.

The Irish Museum of Modern Art was set up as a company limited by guarantee and not having a share capital under the Companies Act 1963. We are a National Cultural Institution under the auspices of the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media.

Acquisition.

IMMA’s Collection is the National Collection of Modern and Contemporary Art and IMMA collects in the present. Its remit is to collect the art of now for the future, to reflect key developments in contemporary visual culture and to keep them in the public domain for future generations.

Donation.

All donations of artworks must be first approved for acquisition by the Director and Head of Collections before they are brought before the Collections and Acquisitions Committee.

Purchase.

All purchases must be first approved for acquisition by the Director and Head of Collections before they are brought before the Collections and Acquisitions Committee. The Director has discretion to purchase works up to a certain value.

Preservation & Management.

IMMA monitors and in most cases actively controls the environment (temperature, humidity, light levels) in order to prolong the life of the assets. IMMA also engages with conservation experts when required. The works of art are publically exhibited in rotation in IMMA’s public programme. Individual works may be viewed in storage by prior appointment.

Disposal.

IMMA does not dispose of any works of art for financial profit. In exceptional circumstances, if a work of art is impaired beyond redemption (i.e., cannot be conserved), the work of art is removed from the database and deaccessioned.

iii) The accounting policies adopted for heritage assets including details of measurement bases used.

The Museum acquires works of art through a variety of methods;

a) Donations under Section 1003 of the Taxes Consolidation Act 1997.
b) Donated Works of Art
c) Purchased Works of Art.

The Value attributed to the asset at the time of acquisition is as follows:

a) Donations under Section 1003 of the Taxes Consolidation Act 1997.

Certain tax liabilities can be settled by way of donation of an important heritage item to a specified national collection provided certain conditions are met. The market value is assessed at the time of donation.

b) Donated Works of Art.

These are valued by an internal expert at the time of acquisition based on comparative works of art and
external market factors.

c) Purchased Works of Art.

These are recorded at the cost of acquisition.
The museum does not conduct an annual valuation and as a result, works of art are carried at cost of acquisition.

d) Impairment Review

The value of any works of art is not altered by market fluctuations in value. The museum reviews the condition of all artworks when going on loan or on public display.

iv) All Heritage Assets are included in the Statement of Financial Position.

v) Heritage Assets recorded in the Statement of Financial Position are disclosed in Note 11.

A summary of transactions relating to Heritage Assets showing cost and value of assets acquired in the period in each of the categories outlined is disclosed in Note 11.

i. Inventory

Inventory is stated at the lower of cost and net realisable value. Net realisable value is defined as the estimated selling price less all costs to be incurred in marketing, selling and distribution

j. Taxation

The Company is exempt from Corporation Tax under Schedule 4, Section 227 of the Taxes Consolidation Act, 1997.

k. Retirement Benefits

The Museum operates a defined benefit pension scheme which is funded annually on a pay as you go basis from monies available to it, including monies provided by The Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media.
Pension costs reflect pension benefits earned by employees in the period and are shown net of staff pension contributions which are treated as refundable to the Department in accordance with financing arrangements. An amount corresponding to the pension charge is recognised as income to the extent that it is recoverable, and offset by grants received in the year to discharge pension payments.

IMMA also operates the Single Public Services Pension Scheme (“Single Scheme”), which is a defined benefit scheme for pensionable public servants appointed on or after 1 January 2013. Single Scheme members’ contributions are paid over to the Department of Public Expenditure and Reform (DPER) Actuarial gains or losses arising on scheme liabilities are reflected in the Statement of Comprehensive Income and a corresponding adjustment is recognised in the amount recoverable from the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media.

The financial statements reflect, at fair value, the assets and liabilities arising from the Irish Museum of Modern Art’s pension obligations and any related funding, and recognises the costs of providing pension benefits in the accounting periods in which they are earned by employees. Retirement benefit scheme liabilities are measured on an actuarial basis using the projected unit credit method.

l. Critical Accounting Judgements and Estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the reporting date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements have had the most significant effect on amounts recognised in the financial statements.

a) Impairment of Works of Art

The Museum conducts an annual impairment review of its Works of Art. The value of any works of art is not altered by market fluctuations in value. The museum reviews the condition of all artworks when going on loan or on public display. In addition, procedures are in place for a full physical verification of artworks every five years in line with standard museum practice. This verification involves a review of the condition of those works. An impairment loss would be recognised if a work of art is impaired beyond redemption, i.e. cannot be conserved. The work of art would then be removed from the database and deaccessioned. The museum does not conduct an annual valuation and as a result, works of art are carried at cost of acquisition. The value of any works of art is not altered by market fluctuations in value. There was no requirement for an impairment loss at the reporting date.

b) Impairment of Property, Plant and Equipment

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. There was no recognition of impairment at the reporting date.

c) Depreciation and Residual Values

The directors have reviewed the asset lives and associated residual values of all fixed asset classes, and in particular, the useful economic life and residual values of fixtures and fittings, and have concluded that asset lives and residual values are appropriate.

d) Retirement Benefit Obligation

The assumptions underlying the actuarial valuations for which the amounts recognised in the financial statements are determined (including discount rates, rates of increase in future compensation levels, and mortality rates are updated annually based on current economic conditions, and for any relevant changes to the terms and conditions of the pension and post retirement plans.

The assumptions can be affected by:
i) The discount rate, changes in the rate of return on high-quality corporate bonds.
ii) Future compensation levels, future labour market conditions.

The average number of persons employed by the company in the financial year was 98
(2020 – 116).

In 2021 €69,886 (2020: €67,869) of Additional Superannuation Contribution (ASC), was deducted and payable to The Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media.

In 2021 €141,139 (2020: €136,534) of Employee deductions for the IMMA Superannuation Scheme were deducted and payable to the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media (see Note 15).

In 2021 €156,066 (2020: €Nil) was received from members of the IMMA Superannuation Scheme as purchase of service. These monies are payable to the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media.

In 2021 €67,466 (2020: €49,860) of Employee deductions for the Single Pension Scheme were deducted and payable to the Department for Public Expenditure and Reform.

There were no termination payments in 2021 (2020 –Nil).

The salary paid to the IMMA Director was €105,463 in 2021 (2020 – €104,255).

The Director’s pension entitlements do not extend beyond the standard entitlements in the model defined benefit scheme. The Director was not in receipt of any performance related pay award. The Director had use of a company car to June 2021 when it was disposed of and not replaced. The car was not used solely by the Director. No Benefit-in-Kind accrued.

Compensation paid to key management personnel is disclosed in note 21.

Note: For the purposes of this disclosure, short term employee benefits in relation to services rendered during the reporting period include salary, overtime allowances and other payments made on behalf of the employee, but exclude employer’s PRSI.

11) Heritage Assets (Works of Art)

As outlined in Accounting Policy 1h the Museum recognises all heritage assets when purchased or acquired. Such assets are carried at cost at the date of acquisition with adjustment for impairment where required. The transactions for 2021 and the previous accounting period are set out below.

The cost of purchased and assisted purchases is the cost at date of acquisition.

The Museum does not conduct an annual valuation.

Under Section 1003, Taxes Consolidation Act 1997 certain tax liabilities can be settled by way of donation of important heritage items to a specified national collection. The market value is assessed at the time of donation by the Revenue Commissioners

The Heritage Fund Act, 2001 established the Heritage Fund. Under this fund IMMA received three Artworks by James Coleman to the value of €1,300,000

A reliable fair value for the donated works of art has been established by internal experts at the time of acquisition based on one or more of the following:

1. Written values originally recorded (where applicable) when the artworks first arrived at IMMA
2. Values which have been researched using Artnet, an online valuation service, which records prices fetched at all auctions and sales worldwide of modern and contemporary art
3. Advice from galleries, artist’s agents and artists

Amounts included in Note 11(d) relate to assets held and maintained by IMMA, to which legal title has not yet been bestowed. As such they have been excluded from the statement of Financial Position. The value attributed to the Gordon Lambert Collection was made by the Gordon Lambert Modern Art Charitable Trust when the Collection donated to IMMA in 1992. In 2011 a number of prints from the Madden Arnholz Collection were valued by Caxton Antique Dealers.

No security has been provided by IMMA in respect of the above creditors.*The IMMA Superannuation Scheme was introduced in 2001. Superannuation deductions of €433,663 (2020: €246,429) covering the period 2001-2021 are retained by the Irish Museum of Modern Art from employees’ pension payments. These deductions are net of pension payments made to retired members of the IMMA Pension Scheme of €109,971 (2020:€115,060) and no lump sums were paid in the year (2020:€8,985). Deductions were greater than payments in 2021.

16) Contingencies

There are no contingent liabilities.

These amounts have been granted to the company for the specific intention of purchasing works of art. See Note 11 for further information on the donations received in 2021.

18) Retirement Benefit Costs

Analysis of total retirement benefit costs charged to the Statement of Income and Expenditure and Retained

Analysis of amount recognised in statement ofComprehensive Income

b) Movement in Net Retirement Benefit obligations during the financial year

Deferred Funding for Retirement Benefits The Museum recognises these amounts as an asset corresponding to the unfunded deferred liability for pensions on the basis of the set of assumptions described below and a number of past events. These include the statutory basis for the establishment of the superannuation schemes, and the policy and practice currently in place in relation to funding public service pensions including contributions by employees and the annual estimates process. While there is no formal agreement regarding these specific amounts with the Department of Tourism, Culture, Arts, Gaeltacht, Sport & Media the Museum has no evidence that this funding policy will not continue to meet such sums as they fall due in accordance with current practice. The deferred funding asset for retirement benefits as at 31 December 2021 amounted to €28,438,220 (2020: €25,321,999)

e) Description of Scheme

The Museum operates a contributory defined benefit superannuation scheme for its employees which was introduced with effect from 1 October 2001.The scheme being operated for the Museum is identical to the Occupational Superannuation Scheme for Established Civil Servants. It is a defined benefit scheme and is operated on a “pay-as-you-go” basis. The contributions are deducted from salaries. The balance between deductions and payments is included in creditors.The Single Public Service Pension Scheme (Single Scheme) is the defined benefit pension scheme for pensionable public servants appointed on or after 1 January 2013 in accordance with the Public Service Pension (Single Scheme and Other Provisions) Act 2012. The scheme provides for a pension and retirement lump sum based on career-average pensionable remuneration, and spouse’s and children’s pensions. The minimum pension age is 66 years (rising in line with State pension age changes). It includes an actuarially reduced early retirement facility from age 55. Pensions in payment increase in line with the consumer price index.The valuation of the defined benefit scheme for the purposes of FRS 102 disclosures has been carried out by an independent actuary in order to assess the liabilities at 31 December 2021. The financial assumptions used to calculate the retirement liabilities and components of the defined benefit cost for were as follows:

The mortality basis adopted allows for improvements in life expectancy over time, so that life expectancy at retirement will depend on the year in which the member attains retirement age (age 65). The table below shows the life expectancy for members currently aged 45 and aged 65.

19) BOARD MEMBERS’ INTERESTS

The Board has adopted procedures in accordance with guidelines issued by the Department of Public Expenditure and Reform in relation to the disclosure of interests by Board Members and these procedures have been adhered to in the year. There were no transactions in the year in relation to the Board’s activities in which the Board Members had any beneficial interest.

The Chair of the Board is entitled to a fee under, “fees payable to members of the boards of non-commercial Public Service Bodies”. However, the Chair waived the fee from 2010 to 2021 inclusive. Directors of the Board are not entitled to any fees.

21) RELATED PARTY DISCLOSURES

Key management personnel in the Irish Museum of Modern Art consist of the Director and members of the Board of Directors. Total compensation paid to key management personnel includes Board member’s fees and expenses, and Director remuneration. Total Director remuneration in 2021 amounted to €105,463 (2020:€104,255). Director expenses in 2021 were €902 (2020: €1,737). Total Board member’s fees in 2021 were €nil(2020: €nil). Total Board member’s expenses in 2021 were €nil(2020: €nil).

22) Events after the Reporting Date

The early months of 2022 have seen a gradual lifting of Covid  restrictions. All galleries are open and most aspects of the Museum programme have resumed. IMMA remains hopeful that commercial outdoor events will be allowed to continue. There remains a degree of uncertainty about the trajectory of the pandemic and developments are continually monitored by the Board.23)

23) APPROVAL OF FINANCIAL STATEMENTS

The Financial Statements were approved by the Board on 12th April 2022