Page 162 - H:\Annual Report\
P. 162
NOTES TO THE ACCOUNTS
1. ACCOUNTING POLICIES assumptions concerning the future and other key
AND OTHER INFORMATION sources of estimation uncertainty at the end of the
reporting period, that have a significant risk of causing
1.1 Basis of Preparation a material adjustment to the carrying amount of assets
and liabilities within the next financial year.
NHS Improvement, in exercising the statutory functions Asset Valuation and Lives
conferred on Monitor, has directed that the financial
statements of the trust shall meet the accounting The value and remaining useful lives of land and
requirements of the Department of Health and Social buildings have been estimated by Cushman &
Care Group Accounting Manual (GAM), which shall be Wakefield. The valuations are carried out in accordance
agreed with HM Treasury. Consequently, the following with the Royal Institute of Chartered Surveyors (RICS)
financial statements have been prepared in accordance Valuation Standards. The valuations for land and
with the GAM 2017/18 issued by the Department buildings were carried out during 2017/18 and were
of Health and Social Care. The accounting policies applied to the 31 March 2018 land and buildings values.
contained in the GAM follow International Financial Asset values have been uplifted to reflect latest BCIS
Reporting Standards to the extent that they are “All in” Tender Price Indices. Valuations are carried out
meaningful and appropriate to the NHS, as determined using the Modern Equivalent Asset basis to determine
by HM Treasury, which is advised by the Financial the Depreciated Replacement Cost for specialised
Reporting Advisory Board. Where the GAM permits operational property and Existing Use Value for non-
a choice of accounting policy, the accounting policy specialised operational property. The value of the
that is judged to be most appropriate to the particular retained land and buildings at 31 March 2018 reflect
circumstances of the trust for the purpose of giving that most of the hospital buildings are in the process of
a true and fair view has been selected. The particular being demolished.
policies adopted are described below. These have been
applied consistently in dealing with items considered The lives of equipment assets are estimated using
material in relation to accounts. historical experience of similar equipment lives with
reference to national guidance and consideration of the
1.1.1 Accounting Convention pace of technological change. Operational equipment
is carried at current value. Where assets are of low
These accounts have been prepared under the value and/or have short useful economic lives, these
historical cost convention modified to account for the are carried at depreciated historical cost as this is not
revaluation of property, plant and equipment, intangible considered to be materially different from fair value.
assets, inventories and certain financial assets and Software licences are depreciated over the shorter of
financial liabilities. the term of the license and the useful economic life.
1.1.2 Going Concern Provisions
These accounts have been prepared on a going Pensions provisions relating to former employees,
concern basis. The trust is planning to be financially including Directors, have been estimated using the life
sustainable over the next five year NHS planning expectancy from the Government’s actuarial tables.
horizon. The trust is planning a trading surplus of £4.4m Other legal claims provisions relate to employer and
in 2018/19. public liability claims and expected costs are advised
by NHS Resolution.
1.2 Critical Accounting Judgements
and Key Sources of Estimation Provision for Impairment of Receivables
Uncertainty A provision for the impairment of receivables has
been made for amounts which are uncertain to be
In application of the trust’s accounting policies, received from organisations at 31 March 2018. The
management is required to make judgements, provision is £ 1,238,000 (31 March 2017: £996,000)
estimates and assumptions. These are regularly and includes a provision of £318,000 (31 March 2017:
reviewed. £389,000) against the Injury Costs Recovery debt.
The recoverability of the Injury Costs Recovery debt
The following are the critical judgements that has been assessed and the trust has fully provided for
management have made in the process of applying incidents that are over 10 years old. The balance of the
the trust’s accounting policies, together with the key Injury Costs Recovery Scheme debt has been provided
Alder Hey Children’s NHS Foundation Trust 162 Annual Report & Accounts 2017/18
