Annual Report and Accounts 2012/13 - Royal Bournemouth Hospital

Financial Accounts30 Losses and special paymentsThere were 140 cases of losses andspecial payments totalling £238,000approved during 2012/13 (2011/12: 74cases, £116,000).There were no cases where the netpayment exceeded £100,000.Note: The total costs included in thisnote are on a cash basis and will notreconcile to the amounts in the notes tothe accounts which are prepared on anaccruals basis.31 Judgement and estimationsKey sources of estimationuncertainty and judgementsIn the application of the FoundationTrust’s accounting policies, theFoundation Trust has made estimatesand assumptions in a number of areas,as the actual value is not known withcertainty at the Statement of FinancialPosition date. By definition, theseestimations are subject to some degreeof uncertainty; however in each case theFoundation Trust has taken all reasonablesteps to assure itself that these items donot create a significant risk of materialuncertainty. Key areas of estimationinclude:l Expenditure ‘accruals’ are includedwithin the total expenditure reportedwith these financial statements.These accruals represent estimatedcosts for specific items of committedexpenditure for which actual invoiceshave yet to be received, together withthe estimated value of capital workscompleted, but not formally valuedas at 31 March 2013. Estimates arebased on the Foundation Trust’scurrent understanding of the actualcommitted expenditure.l An estimate of £1,324,000 is madein relation to the income due fromincomplete patient spells as at 31March 2013 as the true income inrelation to these episodes of care willnot be know with certainty until thepatient is discharged. This estimateis based on historic trend analysis,together with other relevant factors.l An estimate of £433,000 is made inrelation to the value of unpaid annualleave outstanding as at 31 March 2013for which the Foundation Trust has acurrent liability. This estimate is basedon completed returns received fromeach Directorate within the FoundationTrust.l An estimate is made for depreciation/amortisation of £7,823,000. Eachcapital or donated asset is added tothe asset register and given a uniqueidentifier. The value and an estimatedlife is assigned (depending on thetype of asset) and value dividedby the asset life (on a straight-linebasis) is used to calculate an annualdepreciation charge.l An estimate is made for theimpairment of land and buildingsof £2,010,000 of which £214,000has been included within operatingexpenditure. This was advised bythe District Valuer under the ModernEquivalent Valuation method.l An estimate is made for provisionfor doubtful receivables of £819,000.NHS and Non-NHS receivables arereviewed, together with guidance forspecific areas of income, which reflectthe uncertainty of the financial climateof the healthcare and commissioningmarket.l The Foundation Trust has madeprovision within the 2012/13 annualaccounts for restructuring costs asa result of the proposed merger withPoole Hospital NHS Foundation Trust.32 Senior manager remunerationAnnual Report and Accounts 2012/13 49