Annual Report and Accounts 2012/13 - Royal Bournemouth Hospital

Financial AccountsThe estimated useful lives of assets are summarised below:Minimum Life(years)Maximum Life(years)Buildings and Dwellings 10 90Furniture / Fittings 10 10Set-up Costs 10 10Medical and other Equipment 5 10Vehicles 7 10Radiology Equipment 5 7IT Equipment 3 5Property, plant and equipment whichhas been reclassified as ‘Held for Sale’ceases to be depreciated upon thisreclassification. Assets in the course ofconstruction are not depreciated until theasset is brought into use.Revaluation gains and lossesRevaluation gains are recognised inthe revaluation reserve, except where,and to the extent that, they reverse arevaluation decrease that has previouslybeen recognised in operating expenses,in which case they are recognised inoperating income.Revaluation losses are charged to therevaluation reserve to the extent thatthere is an available balance for the assetconcerned, and thereafter are charged tooperating expenses.Gains and losses recognised in therevaluation reserve are reported in theStatement of Comprehensive Income asan item of ‘other comprehensive income’.ImpairmentsIn accordance with the Foundation TrustAnnual Reporting Manual, impairmentsthat are due to a loss of economicbenefits or service potential in the assetsare charged to operating expenses. Acompensating transfer is made fromthe revaluation reserve to the incomeand expenditure reserve of an amountequal to the lower of (i) the impairmentcharged to operating expenses; and (ii)the balance in the revaluation reserveattributable to that asset before theimpairment.An impairment arising from a loss ofeconomic benefit or service potential isreversed when, and to the extent that, thecircumstances that gave rise to the lossis reversed. Reversals are recognised inoperating income to the extent that theasset is restored to the carrying amountit would have had if the impairment hadnever been recognised. Any remainingreversal is recognised in the revaluationreserve. Where, at the time of the originalimpairment, a transfer was made fromthe revaluation reserve to the incomeand expenditure reserve, an amountis transferred back to the revaluationreserve when the impairment reversal isrecognised.Other impairments are treated asrevaluation losses. Reversals of ‘otherimpairments’ are treated as revaluationgains.De-recognitionAssets intended for disposal arereclassified as ‘Held for Sale’ once all ofthe following criteria are met:l the asset is available for immediatesale in its present condition subjectonly to terms which are usual andcustomary for such sales;26Annual Report and Accounts 2012/13