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Amortisation                                           assets acquired or disposed of through finance leases
                                                               are recognised and measured in accordance with the
        Intangible assets are amortised over their expected
                                                               accounting policy for leases described below.
        useful economic lives in a manner consistent with the
        consumption of economic or service delivery benefits.
                                                               All other financial assets and financial liabilities are
        1.8.3 Useful Economic Lives of                         recognised when the trust becomes a party to the
                                                               contractual provisions of the instrument.
        Intangible Assets

                                                               De-recognition
        Useful economic lives reflect the total life of an asset
        and not the remaining life of an asset. Computer
                                                               All financial assets are de-recognised when the rights
        software have a minimum life of 0 years and maximum    to receive cash flows from the assets have expired or
        life of 8 years
                                                               the trust has transferred substantially all of the risks and
        1.9 Inventories                                        rewards of ownership.

        Inventories are valued at the lower of cost and net    Financial liabilities are de-recognised when the
        realisable value. The cost of inventories is measured   obligation is discharged, cancelled or expires.
        using the first-in first-out formula.
        1.10 Cash and Cash Equivalents                         Classification and Measurement

        Cash is cash in hand and deposits with commercial      Financial assets are categorised as “fair value through
        bank and Government Banking Service.                   the income and expenditure”, “available for sale”
                                                               financial assets and “loans and receivables”. The trust
        1.11 Carbon Reduction Commitment                       only has loans and receivables.

        Scheme (CRC)                                           Financial liabilities are classified as “fair value through
                                                               income and expenditure” or as “other financial
        The CRC scheme is a mandatory cap and trade
                                                               liabilities”. The trust only has other financial liabilities.
        scheme for non-transport CO2 emissions. The trust
        is registered with the CRC scheme, and is therefore
        required to surrender to the Government an allowance   Financial Assets and Financial Liabilities at “Fair
        for every tonne of CO2 it emits during the financial year.   Value Through Income and Expenditure”
        A liability and related expense is recognised in respect
        of this obligation as CO2 emissions are made.          Financial assets and financial liabilities at “fair value
                                                               through income and expenditure” are financial assets
        The carrying amount of the liability at the financial   or financial liabilities held for trading. A financial asset or
        year end will therefore reflect the CO2 emissions that   financial liability is classified in this category if acquired
        have been made during that financial year, less the    principally for the purpose of selling in the short-term.
        allowances (if any) surrendered voluntarily during the
        financial year in respect of that financial year.      These financial assets and financial liabilities are
                                                               recognised initially at fair value, with transaction costs
        The liability will be measured at the amount expected   expensed in the income and expenditure account.
        to be incurred in settling the obligation. This will be the   Subsequent movements in the fair value are recognised
        cost of the number of allowances required to settle the   as gains or losses in the Statement of Comprehensive
        obligation.                                            Income.
                                                               Loans and Receivables
        1.12 Financial Assets and Financial
        Liabilities                                            Loans and receivables are non-derivative financial
                                                               assets with fixed or determinable payments which are
        Recognition                                            not quoted in an active market.

        Financial assets and financial liabilities which arise from   The trust’s loans and receivables comprise: cash and
        contracts for the purchase or sale of non-financial items   cash equivalents, NHS receivables, accrued income
        (such as goods or services), which are entered into in   and other receivables.
        accordance with the trust’s normal purchase, sale or
        usage requirements, are recognised when, and to the    Loans and receivables are recognised initially at fair
        extent which, performance occurs, i.e., when receipt or   value, net of transactions costs, and are measured
        delivery of the goods or services is made.             subsequently at amortised cost, using the effective
                                                               interest method. The effective interest rate is the rate
        Financial assets or financial liabilities in respect of   that discounts exactly estimated future cash receipts

        Alder Hey Children’s NHS Foundation Trust          167                          Annual Report & Accounts 2017/18
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