Annual Report and Accounts 2012/13 - Royal Bournemouth Hospital

Financial Accountsworking capital facility, and (iii) any PDCdividend balance receivable or payable.In accordance with the requirements laiddown by the Department of Health (as theissuer of PDC), the dividend for the yearis calculated on the actual averagerelevant net assets as set out in the‘pre-audit’ version of the annual accounts.The dividend thus calculated is notrevised should any adjustment to netassets occur as a result of the audit of theannual accounts.1.14 Value added taxMost of the activities of the FoundationTrust are outside the scope of VAT and,in general, output tax does not apply andinput tax on purchases is not recoverable.Irrecoverable VAT is charged to therelevant expenditure category or includedin the capitalised purchase cost of fixedassets. Where output tax is charged orinput VAT is recoverable, the amounts arestated net of VAT.1.15 Corporation taxUnder current legislation, FoundationTrusts are not liable for corporation tax.1.16 Foreign exchangeThe functional and presentation currencyof the Foundation Trust is sterling.A transaction which is denominated ina foreign currency is translated into thefunctional currency at the spot exchangerate on the date of the transaction.1.17 Third party assetsAssets belonging to third parties (suchas money held on behalf of patients) arenot recognised in the accounts sincethe Foundation Trust has no beneficialinterest in them. However, they aredisclosed within Note 19 to the accountsin accordance with the requirements ofHM Treasury’s FReM.1.18 Losses and specialpaymentsLosses and special payments areitems that Parliament would not havecontemplated when it agreed funds forthe health service or passed legislation.By their nature, they are items that ideallyshould not arise. They are thereforesubject to special control procedurescompared with the generality ofpayments. They are divided into differentcategories, which govern the way thatindividual cases are handled. Lossesand special payments are chargedto the relevant functional headingsin expenditure on an accruals basis,including losses which would have beenmade good through insurance cover hadthe Foundation Trust not been bearingits own risks (with insurance premiumsthen being included as normal revenueexpenditure).However, the losses and specialpayments note is compiled directly fromthe losses and compensations registerwhich reports on an accruals basis withthe exception of provisions for futurelosses.1.19 Going concernAfter making enquiries, the directorshave a reasonable expectation that theFoundation Trust has adequate resourcesto continue in operational existence forthe foreseeable future. For this reason,they continue to adopt the going concernbasis in preparing the accounts.Annual Report and Accounts 2012/13 31