Annual Report and Accounts 2012/13 - Royal Bournemouth Hospital

Financial Accountsto the operation of hardware (for example,application software) is capitalised as anintangible asset.MeasurementIntangible assets are recognised initiallyat cost, comprising all directly attributablecosts needed to create, produce andprepare the asset to the point that itis capable of operating in the mannerintended by management.Subsequently, intangible assets aremeasured at fair value. Revaluation gainsand losses and impairments are treatedin the same manner as for property, plantand equipment.Intangible assets held for sale aremeasured at the lower of their carryingamount or ‘fair value less costs to sell’.AmortisationIntangible assets are amortised overtheir expected useful economic lives in amanner consistent with the consumptionof economic or service delivery benefits.The estimated useful live of assets aresummarised below:Minimum Life(years)Maximum Life(years)Software 3 51.7 Revenue government andother grantsGovernment grants are grants fromGovernment bodies other than incomefrom primary care trusts or NHS trusts forthe provision of services. Where a grantis used to fund revenue expenditure it istaken to the Statement of ComprehensiveIncome to match that expenditure.1.8 InventoriesInventories are valued at the lower of costand net realisable value. Due to the highturnover of stocks within the FoundationTrust, current cost is used as a fairestimate of current value.1.9 Financial instruments andfinancial liabilitiesRecognitionFinancial assets and financial liabilitieswhich arise from contracts for thepurchase or sale of non-financial items(such as goods or services), which areentered into in accordance with theFoundation Trust’s normal purchase, saleor usage requirements, are recognisedwhen, and to the extent which,performance occurs i.e. when receipt ordelivery of the goods or services is made.Financial assets and financial liabilities inrespect of assets acquired or disposedof through finance leases are recognisedand measured in accordance with theaccounting policy for leases describedbelow.All other financial assets and financialliabilities are recognised when theFoundation Trust becomes a party to thecontractual provisions of the instrument.De-recognitionAll financial assets are de-recognisedwhen the rights to receive cash flows fromthe assets have expired or the FoundationTrust has transferred substantially all ofthe risks and rewards of ownership.Financial liabilities are de-recognisedwhen the obligation is discharged,cancelled or expires.Classification and measurementFinancial assets are categorised as‘Loans and receivables’. Financialliabilities are classified as ‘other financialliabilities’.Loans and receivablesLoans and receivables are non-derivativefinancial assets with fixed or determinablepayments which are not quoted in anactive market. They are included incurrent assets.The Foundation Trust’s loans andreceivables comprise financial assets,cash and cash equivalents, NHSreceivables, accrued income and otherreceivables.28Annual Report and Accounts 2012/13