SECTION B: HSC ANNUAL ACCOUNTS FORM & CONTENT OF THE ACCOUNTS

Transcription

DH1/14/30618
SECTION B:
HSC ANNUAL ACCOUNTS
FORM & CONTENT OF THE ACCOUNTS
2013-14
Section B: HSC Body Annual Accounts 2013-14
Contents
The Primary Statements ................................................................................................................... 2
Prior Year Adjustments ................................................................................................................... 5
Notes to the Financial Statements.................................................................................................... 6
Note 1: Statement of Accounting Policies ....................................................................................... 6
Note 2: Segmental Reporting........................................................................................................... 7
Note 3: Staff numbers and related costs .......................................................................................... 8
Note 4: Other Operating Expenses ................................................................................................ 13
Note 5: Income ............................................................................................................................. 19
Note 6.1- 6.2: Property, Plant & Equipment (PPE) ....................................................................... 22
Note 7.1 to 7.2: Intangible Assets ................................................................................................. 24
Note 8: Financial Instruments ....................................................................................................... 25
Note 9: Assets held for sale ........................................................................................................... 25
Note 10: Impairments .................................................................................................................... 26
Note 11: Inventories ...................................................................................................................... 26
Note 12: Trade Receivables ........................................................................................................... 27
Note 13: Cash and Cash Equivalents ............................................................................................. 29
Note 14: Payables .......................................................................................................................... 30
Note 15.1: Public Sector Payment Policy for HSC organisations - Measure of
Compliance ........................................................................................................................ 32
Note 16: Provisions for Liabilities and Charges ............................................................................ 34
Note 17: Capital Commitments ..................................................................................................... 35
Note 18: Leases Commitments ...................................................................................................... 36
Note 19: Commitments under PFI and other service concession arrangements ............................ 37
Note 20: Other Financial Commitments ........................................................................................ 38
Note 21: Financial Guarantees, Indemnities and Letters of Comfort ............................................ 38
Note 22: Contingent Liabilities ..................................................................................................... 40
Note 23: Related Party Transactions ............................................................................................. 41
Note 24: Third Party Assets ........................................................................................................... 42
Note 25: Financial Performance Targets ....................................................................................... 43
Note 26: Analysis of Losses and Special Payments ...................................................................... 45
Note 27: Post Balance Sheet Events .............................................................................................. 49
Note 28: Date Authorised for Issue…………………………………… ....................... ………... 49
The Primary Statements
Presentation of Financial statements - General principles
The objective of IAS 1 is to prescribe the basis for presentation of general purpose financial
statements to ensure comparability with the entity’s financial statements of previous periods
and with the financial statements of other entities.
1. There are 4 primary statements, Statement of Comprehensive Net Expenditure, Statement
of Financial Position, Statement of Changes in Taxpayers Equity, and the Statement of
Cash flows.
2. Pro forma statements are found in the excel template.
a) Statement of Comprehensive Net Expenditure
IAS 1 requires entities to prepare a statement of comprehensive income; HSC Bodies &
NDPB’s shall prepare a Statement of Comprehensive Net Expenditure in accordance
with the format found in the excel template.
Charitable funds should follow the requirements of the Charities SORP.
General interpretation
In applying IAS 1, entities should be aware of the following general interpretation for
the public sector context:
Profit on disposal of an asset can be accounted for as negative expenditure to the extent
that the profit represents a final adjustment of depreciation. Where this is not the case,
profits should be accounted for as income
The Statement of Comprehensive Net Expenditure includes 2 sections, the first
detailing Net expenditure against the Revenue Resource Limit and the second detailing
revaluation movements re Property, plant and equipment and intangibles.
b) Statement of Financial Position
IAS 1 requires entities to prepare a Statement of Financial Position and provides
guidance on the minimum presentation required on the face of the Statement of
Financial Position.
Interpretation of the Statement of Financial Position requirements in IAS 1 for the
public sector context:
For the public sector, the flexibility provided in IAS 1 to select the order of presentation
of line items on the statement of financial position and to present on a liquidity basis is
withdrawn. To ensure consistency and comparability, reporting entities should prepare
their Statements of Financial Position in accordance with the format shown in the excel
template, with additional line disclosure as necessary (agreed with the Department) in
order to properly reflect the entity’s financial position, capital and reserves.
c) Statement of Changes in Taxpayers Equity
IAS 1 requires entities to prepare a Statement of Changes in Taxpayers Equity.
Interpretation of the Statement of Changes in Taxpayers Equity requirements in IAS 1
for the public sector:
All reporting entities will present a Statement of Changes in Taxpayer's Equity
following the format in IAS 1. To ensure consistency and comparability, reporting
entities should prepare their Statements of Changes in Taxpayers Equity in accordance
with the format shown in the excel template.
Revaluation movements regarding Property, plant and equipment and intangibles which
had been included within the Statement of Changes in Reserves (pre 2010/11) are now
disclosed within the Statement of Comprehensive Net expenditure.
Comparative information
IAS 1 provides guidance on the comparative information to be disclosed in the financial
statements. The IAS 1 comparative information requirements should be applied in full
except where directed by the Department.
Capital
Interpretation of the capital disclosures requirements in IAS 1 for the public sector
context:
The financing of public sector entities is ultimately tax-based and an IAS 1 - based
notion of capital does not apply to many of them. Capital disclosures should be given
only with the agreement of the Department.
d) IAS 7 Statement of Cash Flows
Applicability
IAS 7 applies in full to all reporting entities covered by the requirements of this Manual.
Objective of IAS 7
The objective of IAS 7 is to require the provision of information about the historical
change in cash and cash equivalents of an entity by means of a statement of cash flows
that classifies cash flows during the period from operating, investing and financing
activities.
Other requirements
The following requirements should be observed by all entities;
Entities should prepare the statement in accordance with the format shown in the excel
template.
In reconciling the operating cost to operating cash flows, entities should exclude
movements in receivables and payables relating to items that do not pass through the
Statement of Comprehensive Net Expenditure (receivables and payables linked to loans
from the National Loans Fund, capital expenditure, finance leases and PFI and other
service concession arrangement contracts);
In analysing capital expenditure and financial investment, entities should adjust for
receivables and payables relating to capital expenditure and those relating to loans
issued to or repaid by other bodies; and
In analysing financing, entities should adjust for receivables and payables relating to the
capital expenditure in respect of finance leases and on-balance sheet PFI and other
service concession arrangement contracts.
3. Notes to the accounts - IAS 1 requires that entities present a summary of accounting
policies which will disclose the measurement basis used in preparing financial
statements and all other accounting policies that are significant to the understanding of
the financial statements. Entities should disclose key sources of estimation uncertainty
and judgements made in applying accounting policies.
Further notes shall be provided as required by other IFRSs or as necessary to provide
additional information that is not presented on the face of the Statement of Financial
Position, Statement of Comprehensive Net Expenditure or Statement of Cash Flows but
is relevant to provide an understanding of such statements. The following chapters give
guidance on the notes to accompany the 4 primary statements.
4. Comparative information - With the exception of the first year of operation, the
statements will also present the transactions/balances of the previous financial year so that
users of the accounts may make year on year comparisons in accordance with IAS 1.
5. A heading or subheading can be omitted where it is inapplicable for both the current year
and previous year (see note 8 below).
6. Expenses and any deficits arising should be shown in brackets on the face of the primary
statements.
7. Gross Expenditure - Unless specifically stated otherwise, income and expenditure should
be reported and published on a gross basis, i.e. figures should not be netted off. This
means that income from all types of activity should be shown as "income from activities"
or as "other operating income", as appropriate, whilst the associated costs of activities
should be reported under "operating expenses".
8. Zero Notes – where a note in the pro forma accounts is not applicable to an HSC body, a
statement should be included to say that the note is not relevant. (This will keep note
numbers consistent across all HSC bodies). Similarly, where tables or lines within
tables are zero for current year and prior year, the tables or lines should be deleted, with
narrative if necessary, for e.g. “The HSC body has no finance leases”. It is not
appropriate to populate zero lines. If a HSC body finds something, which does not fit
into the template, they should seek advice from the Department on how to account for
this.
9.
Also no need to refer to accounting policies if they don’t apply.
Prior Year Adjustments
IAS 1, Presentation of Financial Statements, details the requirements surrounding the
disclosure of comparative information.
1. The information must include, as a minimum, two statements of financial position, two
of each of the other statements, and related notes. When an entity applies an accounting
policy retrospectively or makes a retrospective restatement of items in its financial
statements or when it reclassifies items in its financial statements, it should include
three statements of financial position, two of each of the other statements, and related
notes. Therefore with regard to the statement of financial position, when a restatement
or a reclassification is made, two periods of comparative information will be shown.
2. This requirement extends to the notes to the financial statements. However, many of
the notes to the statement of financial position will be unaffected by the restatement or
reclassification, therefore only the notes to the additional statement that have been
impacted by the restatement or reclassification should be presented, provided that the
HSC body states in its financial statements that the other notes have not been impacted
by the restatement or reclassification.
3. The accounts template therefore includes 3 columns for the statement of financial
position and for each of the notes relating to the statement of financial position, being
the current period and the 2 preceding periods. The figures for the earliest comparative
period may or may not be relevant dependent upon the circumstances of the HSC body.
If there are no restatements or reclassifications, the columns relating to the earliest
comparative period should be omitted. If there are restatements or reclassifications, the
statement of financial position for the earliest comparative period should be included
and also the earliest comparative period columns for the relevant notes (i.e. the notes
that have been impacted by the restatement or reclassification) should be completed.
Notes to the Financial Statements
Note 1: Statement of Accounting Policies
1. IAS 1 requires that entities present a summary of accounting policies which will disclose
the measurement basis used in preparing the financial statements and all other accounting
policies that are significant to the understanding of the financial statements. Each body
should disclose key sources of estimation uncertainty and judgements made in applying
accounting policies.
2. The note on HSC accounting policies must comply with IAS 8 “Accounting Policies”.
HSC accounts must be produced to reflect the accounting policies given in Note 1 to the
accounts.
3. A pro forma for accounting policies will be included in the excel template of the manual,
based on Trusts but which can be adopted for use by any HSC body.
4. Any material changes to the Accounting Policies note must be authorised by Financial
Accounting Unit.
Note 2: Segmental Reporting
IFRS to be applied in full
The objective of IFRS 8 is to require an entity to disclose information to enable users of its
financial statements to evaluate the nature and financial effects of the business activities in
which it engages and the economic environment in which it operates
Entities are to agree what their segments are and report accordingly, provided the information
is readily available. If it is not possible to identify net expenditure per segment, this should be
done to the extent that it is possible and agree approach with the auditors. Prior year figures
are to be provided for comparative purposes. Entities are to follow the format in the template
of accounts.
The analysis of fees and charges information included within the FReM is not required.
Note 3: Staff numbers and related costs
1
The purpose of this note is to analyse the number and cost of employees employed either
directly or indirectly by the HSC body, including the details of senior employee’s
remuneration.
2
Remuneration must be the amount payable in respect of the Reporting Year and any bonus
payments will be amounts paid in 2013-14 although all or part of the bonus may relate to
activity in earlier years.
Definitions
Permanently / Directly Employed – Staff permanently / directly employed by the HSC
body, include those on outward secondment or loan to other organizations. Generally
this includes all staff paid through the payroll, including Non Executive Directors
(NEDs) if paid through payroll.
Note for HSCB – Permanently / directly employed staff to include prescribing advisors.
Others / Indirectly Employed – Others temporarily engaged on the objectives of the
HSC body. This will include those on inward secondment or loan from other
organisations, agency/temporary staff and contract staff.
Circular HSC(F)48/2011
http://www.dhsspsni.gov.uk/show-publications?txtid=53031
issued on 4 November 2011 includes the following definitions for seconded staff:
Seconded Out Staff - are those staff on your HSC payroll who are working for another
HSC organisation (including the Department) and whose salaries and related costs are
being recharged to that HSC Organisation (including the Department). These should be
shown in the “Permanently / Directly employed” column.
Seconded In Staff - are those staff on another HSC (including Department) payroll who
are working for your HSC body and whose salaries and related costs are being recharged
to your HSC body. These costs should be shown in the “others” column
Contract staff - means staff directly engaged by the HSC body on a contract to
undertake a particular assignment or task. These costs are staff costs as the HSC body
has control over the number and type of staff it engages. These costs should be shown in
the “others” column.
A distinction should be drawn between such arrangements and those in which the HSC
body is buying a service and has no direct interest in the numbers or type of personnel
engaged in providing that service.
Such services may include the provision of cleaning or security, and the development of
IT systems or management consultancy in which the numbers of individuals engaged on
the service may fluctuate depending on the complexity of the issue and are outside the
direct control of the HSC body. Amounts paid in respect of such services should not be
included within staff costs but reflected within operating costs.
Note 3.1 Staff Costs
1
Staff costs should include amounts relating to all full time and part time, directly and
indirectly employed (including board members, and also non-executive board members, if
paid through payroll.) The figures that are reflected within the Statement of
Comprehensive Net Expenditure exclude capitalised staff costs and exclude recoveries
in respect of seconded out staff.
2
Gross Wages and Salaries. This is the total gross pay of all full and part-time employees
earned within the business including any bonus payments. The figures exclude all
redundancy payments made in year, as it is not an in year salaries or wages cost.
Redundancy costs and the costs of early retirements should be shown at note 3.4 (see
below).
3
Social Security Costs. This is the total of the HSC bodies Employer’s National Insurance
Contributions less Statutory Sick Pay (SSP) and Statutory Maternity Pay (SMP).
4
Pension Costs include the total of the HSC bodies employer contributions to pension
schemes (other than NI contributions).
Wages & Salaries, Social Security costs and pension costs are analysed between
permanently employed and other.
Wages & Salaries, Social Security costs and pension costs will include the costs of any
staff that have been capitalised and the amount should also be disclosed separately in the
text below this note. The total staff costs reported in the Statement of Comprehensive Net
Expenditure will exclude capitalised staff costs.
Wages & Salaries, Social Security costs and Pension costs will include the costs of
seconded out staff. The total staff costs reported in the Statement of Comprehensive
expenditure will include these costs. However the recovery of cost for these staff mus
also be shown in note 3.1 and reflected within income shown in the Statement of
Comprehensive Expenditure
5
Capitalised staff costs – any staff costs that have been capitalised and included above
should be listed here so that they can be deducted from the gross costs in arriving at the
amount to be included in the Statement of Comprehensive Net Expenditure. There is no
need to analyse this between ‘Permanently employed’ and ‘Other’.
6
Less recoveries in respect of outward secondments. The line should disclose the
recovery of costs for staff on outward secondment. Netting off is no longer permitted.
There is no need to analyse this between permanently / directly employed and other.
7
Total net costs. This figure is for information purposes only. This figure does not feed
into the Statement of Comprehensive Net Expenditure.
Note 3.2 Average number of Employees
1
The figures should relate to all persons with a cost included at note 3.1 above as either
‘permanently employed’ (if they are on the payroll) or ‘other’ (if not on the payroll).
Separate lines have been included to deal with the average staff number relating to staff
costs that have been capitalised and to the numbers on outward secondment. The relevant
staff numbers should be included within the analysis of total average number of persons
employed; they should then be disclosed on the separate lines to enable them to be
deducted in arriving at the total net average number of persons employed. There is no
need to analyse the staff numbers relating to capitalised costs and outward secondments
between Directly employed and Other.
2
The entries in Note 3.2 are the average numbers of staff employed in each of the following
staff groups:
FOR TRUSTS
Proposed staff classifications (if appropriate)
•
•
•
•
•
•
•
•
•
•
medical and dental;
nursing and midwifery;
professions allied to medicine;
ancillaries;
administrative and clerical;
ambulance staff;
works;
other professional and technical;
social services staff;
other.
FOR OTHER ORGANISATIONS
3
Other organisations may use their own classifications, for e.g. HSCB could simply use
“staff for commissioning”
4
The average number of employees is calculated as the whole time equivalent (WTE)
number of employees under contract of service in the financial year using daily figures for
full time staff.
5
The ‘contracted hours’ method of calculating whole time equivalent number should be
used for staff working reduced hours. This is calculated by taking the contracted hours of
each employee and dividing by the standard working hours to obtain the whole time
equivalent.
6
The sum of the entries of all staff groups should be entered as the total.
7
The average number of employees should be split between:
Directly Employed – Staff who would normally appear on the payroll of the HSC body.
Other – Others engaged in the objectives of the HSC body. This will include those on
inward secondment or loan from other organisations, agency staff and contract staff.
Note 3.3 Senior Employees' Remuneration
1
Please refer to the ‘Remuneration Report’ section of the HSC bodies Annual Report
(Section C of the Manual) for guidance on this Note. If the accounts are published
together with the Annual Report as one document, there is no need to reproduce this
note as a note to the accounts. Rather it will be shown within the Remuneration Report
section of the Annual Report. Otherwise if the annual accounts are published separately
from the Annual Report, this note must be populated with the accounts.
Note 3.4 Reporting of compensation schemes – exit packages
1
An analysis of the exit costs paid during the year by amount and number, within the
bands listed. Comparative data for the prior year should be disclosed in brackets.
Please note that the table should be completed to provide numbers of exit packages as
opposed to costs, with the exception of the bottom row, where total costs should be
shown. These costs will be included within Note 4 – operating expenses.
2
The numbers and costs included within the table will be the costs of compulsory
redundancies (2nd column), and voluntary redundancies and early retirements (3rd
column). It should be noted that the costs of ill health retirement are met by HSC
pension scheme and not included in HSC Accounts.
Note 3.5 Staff Benefits.
1
This relates to non-pay benefits which are not attributable to individual employees, e.g.
group membership of a club. If there are no staff benefits, state that there are no staff
benefits.
2
Where non pay expenditure including, for instance, gifts of other than token value,
employee entertainment or social events and the provision of amenities for the use of all
employees, is linked to incentive schemes and exceeds £100,000 in the year, the details of
the amount and type of expenditure should be stated.
3
Where total non-pay expenditure is less than £100,000 no disclosure is required.
Note 3.6 HSC body Management Costs
1
Management Costs – for HSC Trusts The definition to be used is based on that
circulated under HSS (THR) 2/98 and HSS (THR) 5/98 by Organisations and Human
Resources Directorate of the Department, as amended by HSS (THR) 2/99.
2
Management Costs – for HSCB – Management costs for the HSC Board should also be
calculated on the same basis as previously calculated.
3
Total income is calculated as RRL per note 25.1, excluding the non cash RRL provided
for the in year charge in respect of the clinical negligence provision plus income included
at notes Note 5.1 to 5.3 less interest receivable.
4
There is no requirement for Agencies and NDPB’s to provide management costs. Due to
the size of these bodies it will continue that only the HSC Board and HSC Trusts which
will provide these figures.
For HSC TRUSTS
Note 4: Other Operating Expenses
Entities shall analyse the total of other operating expenses, as recorded in the Statement of
Comprehensive Net Expenditure. Entities shall also disclose expenditure in respect of the
service charges under PFI and other service concession arrangement contracts, rental under
operating leases, interest charges, research and development expenditure, the individual
components of non-cash items, and an analysis of other significant expenditure items as
detailed below:
1
Purchase of care from non HSC bodies - This includes health care and personal social
services purchased from the private and voluntary sectors.
2
Revenue grants to voluntary organisations- This is revenue grants paid to voluntary
organisations (includes Surestart) during the financial year.
3
Capital grants to voluntary organisations- This is amount of capital grants paid to
voluntary organisations during the financial year.
4
Personal Social Services. This will include all expenditure on the Director of Social
Services, supporting professional staff together with their personal support staff (e.g.
personal secretaries).
5
Recharges from other HSC organisations. This includes services bought in (recharged)
from other Organisations, etc. The services are other operating income to the selling
organisation.
6
Supplies and Services - Clinical. This is the total revenue expenditure of the HSC body
on supplies and services for clinical use, including maintenance contracts.
Examples include:
•
•
•
•
•
•
•
•
•
•
occupational and industrial therapy;
drugs;
medical gases;
dressings;
medical and surgical equipment;
X-ray film and equipment;
patient's appliances;
laboratory equipment and instruments;
fluoridation payments to water authorities; and
blood products and fresh blood.
7
Supplies and Services - General. This is the HSC bodies total revenue expenditure on
such things as:
•
•
•
•
•
•
•
•
8
Establishment. This is the HSC bodies total revenue expenditure on administrative
expenses including:
•
•
•
•
•
•
9
cleaning equipment, materials and external contracts;
provisions, catering etc;
contract catering;
staff uniforms and clothing (including contracts for making up etc);
patient's clothing;
laundry equipment, materials and external contracts;
hardware and crockery; and
bedding and linen (both disposable and non-disposable).
printing and stationery;
postage, telephones;
advertising, travel;
subsistence;
removal expenses; and
staff cars.
Transport. This is the HSC bodies total revenue expenditure on:
•
•
•
•
•
•
Vehicle insurance;
fuel and oil;
maintenance equipment, materials and external contracts;
hire of transport,
hospital car services,
miscellaneous transport expenses.
10 Premises. This is the bodies total revenue expenditure on:
•
•
•
•
•
•
•
•
•
coal;
oil;
electricity;
gas;
other fuel;
water and sewerage;
general supplies and services;
furniture;
furnishings and fittings;
•
•
•
•
•
•
•
•
office equipment;
computer hardware and software*;
data processing services;
rates;
rent;
property insurance;
engineering and building maintenance; and
other miscellaneous.
*Where not capitalised in accordance with the DHSSPS Capital Accounting Manual.
Bad Debts - This is the total of any bad debts written off in the year (previously unprovided for).
OTHER ORGANISATIONS
Should use the above where applicable, other headings should be added where expenditure
is significant.
HSCB
Rather than classifying costs as operating costs HSCB costs are analysed into 3 smaller headings;
4.1 Commissioning, 4.2 Operating expenses, 4.3 Non cash.
Note 4.1 Commissioning
•
•
•
•
•
GMS, FDS, FPS, FOS – Expenditure for FHS, excluding salary costs and non cash;
NHS Trusts – Expenditure incurred with NHS Trusts, excludes HSC and ROI Trusts;
Other providers of healthcare and PSS- Includes revenue grants to voluntary bodies;
Capital grants to voluntary bodies – This is capital grants to voluntary organisations;
Misc – any other Commissioning exp not included above.
Note 4.2 – Operating expenses
As for Trusts; HSCB can use this analysis if applicable or can analyse according to significant
areas of spend. If expenditure is not material in any heading could be disclosed within
miscellaneous.
Note 4.3
Non cash items
See below – as for Trusts
The following headings are mandatory for ALL Organisations;
1
Rentals under operating leases. This is the total amount charged to operating expenses
in respect of operating leases.
2
Interest Charges. This is the total interest paid and payable in respect of the reporting
year on:
•
•
•
•
•
•
IBD;
Further Government borrowing;
Other borrowing, e.g. PFI and other service concession arrangements;
Finance leases;
Late payment of commercial debt;
Any Other Interest payments.
3
PFI and other service concession arrangements service charges. This is the amount in
respect of the service element (excludes interest – shown above) of both on and off
balance sheet PFI and other service concession arrangements schemes
4
Miscellaneous. This includes any expenditure that has not been analysed in the other
headings, including the cost of audit fees associated with the National Fraud Initiative
which will be invoiced by NIAO.
Any material items of miscellaneous expenditure should be supported by a separate note
detailing their nature and amount.
Non Cash items
5
Depreciation. This is the total charged to the Statement of Comprehensive Net
Expenditure in respect of the depreciation of PPE and should equal the depreciation per
the PPE note.
6
Amortisation. This is the total charged to the Statement of Comprehensive Net
Expenditure in respect of the amortisation of any intangible assets, such as deferred
development expenditure (amortisation of deferred assets arising from PFI and other
service concession arrangements schemes should be shown under the ‘other’ heading).
This should equal the amortisation per the intangible note.
7
Impairments. This involves impairment losses in respect of tangible & intangible assets
due to a clear consumption of economic benefits. This will also include impairments due
to price changes where there is no corresponding positive balance on the revaluation
reserve under IAS 36.
Please note, impairments as a result of economic consumption are directly charged against
Net expenditure. It is no longer permitted to offset such impairments against revaluation
reserves.
Impairments in operating expenses + impairments in revaluation reserve =
impairments in property, plant & equipment and intangible asset note.
8
(Profit) on disposal of property, plant & equipment assets (excluding profit on land).
The profit is the difference between the sale proceeds (after disposal costs) and the
amount at which the asset is recorded i.e. the net book value based on the revalued or
indexed amount. This should be recognized as a credit to expense items (depreciation) –
not within income, if the depreciation charge is considered inaccurate. A profit on sale
of land is recognised as income (as land is not depreciated).
9
Loss on disposal of property, plant & equipment (including loss on land). The loss is
the difference between the sale proceeds (after disposal costs) and the amount at which
the asset is recorded i.e. the net book value based on the revalued or indexed amount,
not the historic cost. The loss is recorded as an expense within the Statement of
Comprehensive Net Expenditure.
10 (Profit) on Intangibles. The profit is the difference between the sale proceeds (after
disposal costs) and the amount at which the asset is recorded i.e. the net book value
based on the revalued or indexed amount. This can be recognized as a credit to expense
items (depreciation) – not within income, if the depreciation charge is considered
inaccurate. A profit on sale of land is recognized as income.
11 Loss on Intangibles. The loss is the difference between the sale proceeds (after disposal
costs) and the amount at which the asset is recorded i.e. the net book value based on the
revalued or indexed amount, not the historic cost. The loss is recorded as an expense
within the Statement of Comprehensive Net Expenditure. Amounts in respect of
purchased and donated assets should be included here.
12 Provisions provided for in year. This equals arising and write back of all provisions
(including clinical negligence) in the year and can be linked to the provisions note.
13 Costs of borrowing of provisions. This equals the costs of borrowing for all provisions
and can be linked to the provisions note.
14 Audit Remuneration. This is the notional amount of fees payable to the external auditor
for the reporting year in respect of fees for auditing the annual accounts and notional fees
for any work other than auditing the accounts and returns.
This will not include any fees that are directly invoiced by NIAO for e.g. for audit work
associated with the National Fraud initiative as this will be invoiced by NIAO and
included within miscellaneous expenses as noted above.
Note 5: Income
1. All reporting entities should provide an analysis of operating income, together with
commentary where appropriate, that enables users of the financial statements to
understand the nature of the entity’s operating income.
2. As from 1st April 08 (1st April 09 for HSCB, BSO, PCC, PHA), any income classified as
Grant in Aid is excluded from the Income note and treated as financing and credited to the
General Fund.
Refer to circular HSS (F) 11/2009 http://www.dhsspsni.gov.uk/hss_f_11-2009.pdf for
examples of income that are reflected within the Income note. Please refer to this circular
for funding to be treated as Grant in Aid and processed through reserves and therefore
NOT reflected within this note.
This note therefore excludes SBA income, NIMDTA, SUMDE, DHSSPS funding (cash
draws) which are classified as Grant in aid and treated as financing and credited to the
General Fund.
3. From 1st April 2010, cash required to cover the cost of clinical negligence settlements will
be treated as grant in aid and therefore excluded from the Income note and treated as
financing
and
credited
to
the
General
Fund.
Circular HSC (F) 58/2010, http://www.dhsspsni.gov.uk/show_publications?txtid=46571
issued on 22nd December 2010 refers.
Note 5.1 Income from Activities (excluding Grant in Aid)
1. This note discloses Non Grant in Aid income of HSC bodies from their main HSC
functions. All income normally relates to continuing activities.
The headings below apply primarily for HSC Trusts. These can be used by all HSC
bodies if appropriate. Other headings can be added with the agreement of Financial
Accounting Unit in the Department. Headings must be included for all significant
areas of income >£1m
HSC TRUSTS
1. GB/Republic of Ireland Health Authorities. This entry records the amount received or
receivable from other GB or Republic of Ireland Health Authorities.
2. HSC bodies. This entry comprises income received and receivable from other HSC
bodies for contracted services (except services that do not include episodes of patient care)
provided by the Trust.
3. Non-HSC.
•
•
Private Patients. This entry records all income received and receivable from private
patients;
Other. This entry records all income received and receivable for the provision of
patient care etc, from agencies other than the Department, UK NHS bodies or UK
private patient organisations. This includes road traffic act income and amenity total
income.
4. Clients Contributions. This includes income received and receivable from clients
receiving personal social services e.g. residential care.
5. HSCB.
The headings below have been agreed for HSCB to replace above
•
•
•
Income from Dept of Education – This is income for Surestart;
CAWT – Cooperation and working together;
Family Health Services Receipts – FHS receipts and recoveries re medical, dental;
pharmaceutical and ophthalmic services.
Note 5.2: Other Operating Income – all bodies (Excluding Grant in aid)
1. This represents the income arising out of the HSC Bodies other day-to-day operational
activities. Organisations should use the headings below where applicable. New headings
to be added for any significant areas of income >£1m.
2. Income from non patient services - This entry should include income for services that
do not include episodes of patient care. (Netting off of such items against expenditure for
the service should be kept to a minimum.) Examples of such items could include the
manufacture and sale of drugs, laundry services managed by the HSC body, pharmacy,
laboratories and radiology and other income generation receipts
3. Charitable and other Contributions to Expenditure. This entry is the total of all
revenue grants and monies received from any source in support of the activities of the
HSC Body. Such activities may include research and development grants, education
research and training grants from third parties. Material items should be disclosed
separately.
4. Donations / Government grant / Lottery funding for non-current assets. This is a
new category added in 2011/12 to reflect the recognition of amounts received in respect
of government grants or donations for non-current assets as income following the
removal of the government grant and donated asset reserves. All government grants and
donated assets should be recognized as income reflecting the conditions or restrictions
placed on their use by the providers. They should be recognized when receivable unless
there are conditions on their use which, if not met, would mean the grant is repayable.
In such cases, the income should be deferred (Dr Bank Cr Deferred Income) and
released when the obligations are met (these conditional grants should be transferred to
current / non-current liabilities as deferred income until the conditions are met). Where
a grant has only restricted use (and not conditional) it should be recognized as income
immediately.
5. Seconded Staff. This should include income received in respect of staff seconded to other
bodies. This should equate to the seconded staff recoveries reflected within the salaries
and wages note.
6. Profit on disposal of land. The profit on sale of land is the difference between the sale
proceeds (after deducting any sales expenses) and the amount at which the asset is
recorded i.e. the net book value based on the revalued or indexed amount, not the
historic cost.
7. Other Income. This covers any other income not chargeable to the above headings.
Material amounts must be specified as appropriate.
Note 5.3 Deferred Income.
1. Income released from conditional grants. The income released in respect of
conditional grants transferred to current / non-current liabilities until conditions are met
should be included here.
FOR HSCB, the following may also be listed under Other Income;
•
•
Accommodation - This is accommodation income previously shown in note 2.5;
Canteen - This is income from canteen, previously shown in note 2.5.
Note 6.1- 6.2: Property, Plant & Equipment (PPE)
1. The purpose of this note is to identify by category the property, plant & equipment assets
held by the HSC Body (including those held under finance leasing arrangements), and the
movements in the value of property, plant & equipment assets during the reporting year.
2. IAS 16 requires the full disclosure of the comparative PPE note, therefore note 6.1 is for
current year PPE, and note 6.2 is for prior year PPE.
3. Assets should be valued in accordance with the Capital Accounting Manual updated for
any IFRS changes. Where changes to the value of existing assets are recorded as a result
of indexation or revaluation, corresponding entries should be made to the revaluation
reserve. HSC bodies should note that assets in the course of construction are not subject
to indexation.
4. On disposal of an asset, the profit or loss should be taken to the Statement of
Comprehensive Net Expenditure Account for the reporting period.
5. Categories of asset•
Land – this includes land underlying and land associated with buildings;
•
Buildings (excluding dwellings) – hospitals, office accommodation and storage
facilities fall into this category;
•
Dwellings – buildings used primarily or entirely as residences, including any
associated structures such as garages and parking areas. Nurses’ hostels are to be
included here. Temporary accommodation (e.g. for staff working shifts) is not
included, nor is any accommodation situated in a hospital where the main function of
the building is a hospital. Accommodation (even self-contained) for patients should be
considered as hospital buildings and so excluded from the “dwellings” category;
•
Assets under construction – This category includes assets under construction and is
used for mainly buildings or machinery where cost has been incurred in
commencing the asset and it is not yet available for use;
•
Plant and Machinery (Equipment) – This category includes all medical equipment.
Plant is taken to mean mobile or other heavy machinery that is no longer integral to a
building;
•
Transport Equipment - This category includes all transport equipment including
motor vehicles;
•
Information Technology (IT) – this includes hardware used for processing data and
communications;
•
Furniture and fittings – this includes furniture and office fittings where these have
been capitalised as having a value over £5,000 of form a “grouped asset” as defined in
the Capital Accounting Manual. Also, the initial costs of setting-up (equipping) a new
building or refurbished building will be capitalised here.
It is now compulsory for HSC bodies to use these categories.
6. The changes between the opening and closing net book value are given for each category
of asset. For each category total amounts should be given of additions, indexation,
revaluation and disposals. Depreciation should be in accordance with ‘The Capital
Accounting Manual’. Note that disposals are recorded at book value.
7. Per FReM paragraph 6.2.7 (g) as part of the PPE note entities are required, in the year the
asset is acquired, to separately disclose the fair value of those assets funded by
government grant, donation or lottery funding. Where the funder provides cash, rather
than physical assets, any difference between the cash provided and the fair value of the
assets acquired should also be disclosed. A new row has been added at notes 6.1 and 6.2
for this purpose with an analysis by source to be provided at the end of the note.
8. In preparation for the introduction of Clear Line of Sight (CLoS) two new lines have been
inserted into the PPE note these are:
i.
ii.
Impairment charged to the SoCNE;
Impairment charged to the revaluation reserve.
9. From 2012/13 onwards negative revaluation is to be treated in the same way as negative
indexation, i.e. as an impairment.
10. Finance Leases/Hire Purchase - HSC bodies should identify the net book value of assets
held under such arrangements for each of the categories of assets shown above as at
31 March of the reporting year and previous year. The total amount of depreciation
charged to the Statement of Comprehensive Net Expenditure in respect of such assets for
the reporting year should be shown together with a comparative figure for the previous
year.
11. Entities to include a note giving names and qualifications of the valuers of any assets,
what assets they valued and date on which they were value. The note should also state that
PPE are valued using indices (if appropriate).
Note 7.1 to 7.2: Intangible Assets
1. The purpose of this note is to identify by category the intangible assets held by the
Organisation, and the movements in the value of intangible assets during the reporting
year.
IAS 16 requires the full disclosure of the comparative intangible note, therefore note 7.1 is
for current year intangibles and note 7.2 for prior year intangibles.
2. Categories of intangible asset are those with a life of more than 1 year i.e.•
•
•
•
•
•
•
•
Information Technology – software developed in-house or by third parties (but not
software licences);
Software licences – the right to use software developed by third parties;
Websites;
Development expenditure;
Licences, trademarks and artistic originals – original films, sound recordings, etc on
which performances are recorded or embodied;
Patents – inventions that are afforded patent protection;
Goodwill;and
Payments on account and intangible Assets under Construction.
A number of columns in the table will not be used as they do not apply to HSC bodies.
The columns which do not apply should be left blank. To facilitate CLoS the blank
columns
should
not
be
deleted
from
the
table.
3. Goodwill is also included in the FReM, but this is not relevant to the HSC as goodwill
(in accounting terms) cannot be purchased and is not internally generated in the HSC.
4. Intangible assets held for operational use are valued at historical cost, unless a readily
ascertainable market value exists for the particular asset. As there is no active market
intangible assets are maintained at historical cost.
5. In preparation for the introduction of Clear Line of Sight (CLoS) two new lines have been
inserted into the PPE note these are:
iii.
iv.
6.
Impairment charged to the SoCNE;
Impairment charged to the revaluation reserve.
From 2012/13 onwards negative revaluation is to be treated in the same way as negative
indexation, i.e. as an impairment.
7. Intellectual property and licenses to use software could arise as intangible assets. In
these cases IAS 38 applies. If IAS 38 applies and the life is considered finite
amortisation should take place over the estimated useful life.
8. Per FReM paragraph 6.2.7 (g) as part of the PPE note entities are required, in the year the
asset is acquired, to separately disclose the fair value of those assets funded by
government grant, donation or lottery funding. (For HSC bodies, this requirement has
been extended to the intangibles note). Where the funder provides cash, rather than
physical assets, any difference between the cash provided and the fair value of the assets
acquired should also be disclosed. A new row has been added at notes 7.1 and 7.2 for this
purpose with an analysis by source to be provided at the end of the note.
Note 8: Financial Instruments
HSC bodies should refer to chapter 9 of 2012-13 FReM for detailed guidance. Per the FReM
pro forma financial assets are investments and PDC is not an equity instrument and NIAS
should present as a form of financing.
Note 9: Assets held for sale
This is a new requirement per IFRS 5 Non-current assets held for sale comprise non-current
assets that are held for resale rather than continuing use in the business.
Assets held for sale should be analysed between land and buildings
1. Cost at 1 April – This is the cost figure brought forward from 31 March in previous year
(for those assets that have transferred from non-current assets to assets classified as held
for sale).
2. Transfers from (disposals) – this is the amount relating to the cost element moving from
non-current assets to assets classified as held for sale.
Depreciation
3. At 1 April - This is the depreciation figure brought forward from 31 March in previous
year relating to those assets that have transferred from non-current assets to assets
classified as held for sale.
4. Transfers from (Disposals) – include here the depreciation in year up until date decision
is made that it is no longer a non current asset.
When a non current asset is classified as held for sale the factors or circumstances of the sale
must be disclosed along with the expected timing of sale. Once a non current asset is
classified as held for sale it is no longer depreciated.
Note 10: Impairments
Entities are required to disclose the total impairment charge for the year showing how much
has been charged direct to the Statement of Comprehensive Net Expenditure (SoCNE)
(within the Net expenditure total) and how much has been taken through to the revaluation
reserve (this amount will be disclosed within the “Other Comprehensive Expenditure”
section of the Statement of Comprehensive net Expenditure). Impairments due to a general
fall in prices is recognised firstly in the revaluation reserve and if there is not enough in the
revaluation reserve to cover, the remaining amount is taken to the SoCNE.
Economic impairments are taken in full directly to the SoCNE (with a corresponding
transfer from the revaluation reserve to the General Reserve for any amount which could
have been used had it been permitted).
The total impairment charge is taken from the PPE and intangibles notes and should include
negative indexation, and is net of reversal of impairments (see below).
This should be analysed between PPE and intangibles.
Reversal of impairments – Where an impairment loss recognised in a previous period
reverses e.g. because of a fall in the value of buildings in the previous year has now reversed
due to an increase in the indexation for buildings. The reversal should be recognised firstly in
the SoCNE, to the extent that the original impairment loss was recognised in the SoCNE.
Any remaining balance of the reversal of impairment should be recognised in the revaluation
reserve. (For further details see the Capital Accounting manual at 6.13).
Note 11: Inventories
1. IAS 2 applies, as interpreted, to all reporting entities covered by this Manual
2. The objective of IAS 2 is to ensure that inventories are valued at the lower of cost and
net realizable value and that their sub-classification in the Statement of Financial
Position or in the notes to the financial statements indicates the amounts held in each of
the main categories in the standard statement of financial position formats
3. This note represents the total value of stocks and work-in-progress. Part completed
contracts for the provision of healthcare services do not represent work in progress but
may be accrued as receivables. This note provides an analysis of physical stocks held by
the HSC body at the Balance Sheet date.
4. The figures should include:
•
•
•
directly consumable items;
any products in intermediate stages of completion where processing or manufacture
of such items is carried out by the HSC body; and
finished goods.
Inventories should be listed by classification for e.g.; clinical, general, other.
5. The figures should exclude:
•
•
the provision of health care services under partially completed contracts, and
assets in the course of construction
HSC bodies should ensure that any changes in the designation of items of stock comply with
IAS 2. If a HSC body changes the treatment of certain items of stock (then it should make a
prior period adjustment in accordance with IAS 8 if the change is material).
Note 12: Trade Receivables
1. The purpose of this note is to identify the HSC bodies receivables and the sector to which
they relate. The note is in two sections for amounts due in less than one year and more
than one year.
2. Receivables should be analysed into the following categories;
Trade and other receivables:
•
•
•
•
•
•
•
Trade receivables for care e.g. NHS;
Deposits and advances e.g. franking machine;
VAT receivable;
Other receivables - not relating to fixed assets;
Other receivables - relating to property plant and equipment;
Other receivables - relating to intangibles;
Other receivables e.g. RTA, payments receivable, VAT, salary overpayments;
seconded staff.
Other current assets
•
•
Other prepayments and accrued income including pension prepayments;
Current part of PFI and other service concession arrangement contracts receivable.
Significant receivable balances should be identified separately. The above is the minimum
disclosure.
3. Receivable balances should be net of the provision made for bad debts and should
correspond to the amount shown on the face of the Statement of Financial Position as
"receivables". The provision for bad debts should be disclosed separately.
4. HSC prepayments and income accruals should be included under HSC receivables. HSC
receivable balances should be agreed with the bodies concerned.
5. If applicable receivables relating to capital should be separately identified.
6. Any amounts recoverable after more than one year should be separately identified within
note 12 and under the appropriate category of receivable noted above, these will be shown
under Non Current Assets on the face of the Statement of Financial Position.
Note 12.1: Intra-government balances (Receivables)
Intra-government balances are defined as balances between the reporting entity and other
bodies within the boundary set for the whole of government accounts (which is basically all
Government bodies in the UK).
1. The disclosure should be analysed between;
•
•
•
•
•
Balances with other central government bodies i.e. DHSSPS, BSO, Board, Other
Central Government Departments, NDPB’s, Agencies;
Balances with local Authorities for e.g. Councils;
Balances with NHS/HSC Trusts;
Balances with public corporations and trading funds;
Balances with bodies external to government.
Where any HSC body is in doubt as to the categorisation of a body, please contact Financial
Accounting Unit.
Please note that the total of Note 12.1 should agree to the total of Note 12
Note 13: Cash and Cash Equivalents
1. This includes the total value of the HSC bodies short term investments. (If there is an
overdrawn amount this should be shown as a minus figure).
2. Short term investments have a maturity of less than one year at the date of purchase.
Long-term investments can be considered to be those which are intended to be retained for
more than one year from the balance sheet date and are included in note 8 financial assets.
3. Valuation should be the lower of purchase price or net realisable value.
4. If the investments are listed the market value should be shown if this differs from the
valuation in the accounts.
Note 14: Payables
1. The purpose of this note is to provide an analysis of the payables of the HSC body as at
the Balance Sheet (SoFP) date. The note is in two sections for amounts due in less than
one year and more than one year.
2. Payables should be analysed into the following categories:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Other Taxation and Social Security
VAT payable
Bank Overdrafts - This is the total value of all overdrafts held by the HSC body at the
Balance Sheet (SoFP) date
Trade Revenue Payables - (For HSCB to include FHS, including GMS, Voluntaries,
Non HSC Trusts)
Trade Capital Payables - property, plant and equipment
Trade Capital Payables - Intangibles (for HSCB to include GP ICT)
Payroll payables- including accrued salaries and wages, for e.g. AFC, employee
benefit accrual
Clinical Negligence - This is the accrual for clinical negligence and will include
clinical negligence settlements agreed but unpaid at the year end
Accruals and deferred income - Excluding salaries & wages accruals. This will
include payments received on account. Also include the element of income deferred
in relation to conditional government grants i.e. if a grant has been received with
conditions attached, which if not met, would mean the grant is repayable, then income
should be deferred and released when the obligations are met. The element of income
deferred should be included here or within the same category within amounts payable
after more than one year
Accruals and deferred income – relating to property, plant and equipment
Accruals and deferred income – relating to intangibles
BSO payables - for support services
Other payables - This represents all payables not included under other headings,
including other payables not relating to care, for e.g. HSC Trusts, DHSSPS, to
include pensions relating to former directors/other staff
Current part of finance leases - This represents the capital element only.
Current part of long term loans
Current part of imputed finance lease of on balance sheet (SoFP) PFI and other
service concession arrangements contracts
Significant payable balances should be identified separately. The above is the minimum
disclosure.
Payables: Amounts falling due after more than one year.
3. Finance Leases -Obligations under finance leases should be identified separately. An
analysis of future obligations under finance leases is presented in the Commitments Note.
4. Imputed finance lease of on balance sheet (SoFP) PFI and other service concession
arrangements contracts.
5. Long term loans - This is the total value of loans repayable after 12 months from the
balance sheet (SoFP) date. It excludes amounts repayable within one year. The total
amount repayable after more than one year plus the amount repayable within one year
above must equal the total loans analysed in Loans note.
Note 14.1: Intra-government balances (Payables)
1. Intra-government balances are defined as balances between the reporting entity and other
bodies within the boundary set for the whole of government accounts.
2. The disclosure should be analysed between;
•
•
•
•
•
Balances with other central government bodies i.e. DHSSPS, BSO, Board, Other
Central Government Departments, NDPB’s, Agencies;
Balances with local Authorities for e.g. Councils;
Balances with NHS/HSC Trusts;
Balances with public corporations and trading funds;
Balances with bodies external to government.
Where any HSC body is in doubt as to the categorisation of a body, please contact Financial
Accounting Unit.
Please note that the total of Note 14.1 should agree to the total of Note 14.
Note 14.2: Loans
1. This note analyses the loans and relates to principal only and excludes interest.
2. The note analyses loans by source and by period outstanding. It is necessary to calculate
the principal outstanding over the various time periods.
3. This note is in three sections. The total of this note must equal the total of ‘current
instalments due on loans’ from ‘payables amounts falling due within one year’ and ‘long
term loans’ from ‘payables amounts falling due after more than one year’.
Note 15.1: Public Sector Payment Policy for HSC organisations - Measure of Compliance
1.
HSC organisations are obliged to ensure that suppliers of goods and services are paid as
promptly as possible. As such, HSC bodies should comply with applicable terms and
appropriate government accounting guidance.
In relation to contracts entered into prior to 16 March 2013 payment is regarded as late if
made outside the agreed terms, or, where no terms are agreed, 30 days after receipt of a
valid invoice or receipt of goods, whichever is later.
In relation to contracts entered into post 16 March 2013 payment is regarded as late if
made outside 30 days of receipt of a valid, undisputed invoice.
In the 2013/14 prompt payment reporting should be on the basis of both bills paid within
“30 days or other agreed terms” and within “30 calendar days of receipt of an undisputed
invoice”.
Any expenditure made outside these terms should be exceptional and noted in accounts.
The target is to pay all non HSC trade payables within 30 calendar days of receipt of
goods or a valid invoice (whichever is later) unless other payment terms have been agreed.
Suppliers must therefore receive payment by Bank Automated Credit System (BACS)
within 30 days (or a cheque issued and dated within that period)
2.
A standard format for disclosure is given in the pro forma notes to the accounts.
3.
Total bills paid. This is the total of non-HSC trade payable invoices paid during the year
(by number and value).
4.
Total bills paid within 30 days or under agreed terms. This is the total of non-HSC
trade payable invoices paid during the year within the target period.
4. Percentage of bills paid within 30 days or under agreed terms. This is the total bills
paid within target expressed as a percentage of the total bills paid during the year.
Decimal places are not required. (Round to nearest whole number).
5. Total bills paid within 30 days of receipt of an undisputed invoice. This is the total of
non-HSC trade payable invoices paid during the year within 30 days of receiving an
undisputed invoice.
6. Percentage of bills paid within 30 days of receipt of an undisputed invoice. This is
the total bills paid within 30 days of receiving an undisputed invoice expressed as a
percentage of the total bills paid during the year. Decimal places are not required. (Round
to nearest whole number).
It is mandatory to complete this note on the basis of total bills paid.
Note 15.2: The Late Payment of Commercial Debts Regulations 2002
1. Circular HSS (F) 1/99 http://www.dhsspsni.gov.uk/hssf01-99.pdf advised HSC bodies
of the implications of the Late Payment of Commercial Debts (Interest) Act 1998, which
at the time allowed businesses with fewer than 50 employees to claim interest on late
payment of debt. The late payment of Commercial debt regulation 2002 extended this so
that all businesses (including public sector) could claim late interest on late payment (no
further circular issued).
2. 15.2 relates to the above legislation which allows businesses to claim a compensation
payment for the claim being late plus interest from public sector organisations on debts
incurred outside agreed terms or 30 days after receipt of a valid invoice.
3. The purpose of this note is to disclose the amount
(a) paid as compensation for the claim being late and
(b) Interest Payable arising from claims made by businesses under this legislation.
4. The legislation can be summarised as follows:
5. Businesses may claim interest from public sector organisations on the late payment of
debts at a rate of 8% above the Bank of England base rate at 31 December (for claims
from 1 January to 30 June) and bank of England base rate at 30 June (for claims for period
1 July to 31 December).
6. In addition, a business may claim compensation for debt recovery costs per invoice of
•
•
•
Up to £999.99 (including VAT) £40;
£1,000 to £9,999.99 (including VAT) £70;
£10,000 or more (including VAT) £100.
7. Payment of a commercial debt is deemed to be late when it is received after the expiry of
the contractually agreed credit period, or the credit period in accordance with trade custom
and practice, or in the course of dealing between the parties, or the default period defined
in the legislation.
8. Where no credit period is defined in a contract, or no contract exists, the Act sets a default
period of 30 days from delivery (i.e. receipt) of invoice for payment or of the
goods/services, whichever is the later. (This is consistent with the prompt payment code.)
9. Circular HSC (F) 53/2010 http://www.dhsspsni.gov.uk/hsc-f-2010-53.pdf issued on 16
November 2010 advises that the interest and/ or compensation payments should be
reflected within the losses note as fruitless payments, as the payment should have been
avoided by making the payment in accordance with the suppliers’ terms or the default
period of 30 days.
This is now separately identified within the losses note. The fact that these payments are included
on the losses note should be referred to at note 15.2 below the total amount i.e. the note will
include the following narrative “This is also reflected as a fruitless payment in note 26”.
Note 16: Provisions for Liabilities and Charges
1. This note analyses changes in the provisions for liabilities and charges as required by
IAS37. The figures must be analysed over the column headings shown and between
‘provided in year’, ‘utilised during the year’, ‘not required written back’ and ‘unwinding
of discount’.
Provisions must be shown gross. Any amount expected in reimbursement against a
provision (and included in receivables) should be disclosed after the table.
2. Provided in year. This relates to increases to existing provisions or new provisions.
Gross amounts taken to the Statement of Comprehensive Net Expenditure for the present
year for all provisions.
3. Utilised during the year. This relates to reductions in provisions during the current year
due to:
• payments during the year against a provision;
• payments becoming sufficiently certain to transfer to payables;
• amounts agreed during the year as payable but unpaid at year end. These outstanding
amounts are transferred from provisions to payables.
Utilised are accounted for through the Statement of Financial Position only and not
through the Statement of Comprehensive Net Expenditure.
4. Not required written back. This is used for the write back of a provision or part of a
provision which is no longer required.
5. Unwinding of discount. The increases in provisions due to the unwinding of discount as
the settlement date gets nearer are included here.
The net total of lines 2, 4, and 5 above for all provisions, are the amount charged to the
Statement of Comprehensive Net Expenditure for the year and agree with the operating
expenses note.
6. Provisions not provided for - RRL cover for provisions, particularly clinical negligence
– non cash RRL cover will be provided to cover the cost of the net increase in provisions.
In order to ensure that the correct level of RRL cover is provided, where a settlement is
made in excess of the value included within the provisions, all organisations should
ensure that they process the difference by first creating the relevant additional provision
within the Statement of Financial Position. Otherwise the RRL cover granted will not be
sufficient to cover the total costs arising, because settlements will have been created as
cash costs directly into the Statement of Comprehensive Expenditure for which there will
be no RRL cover.
Notes to the Financial Statements Note 16: (Cont’d):
7. Additional disclosure for RPA utilised - The RPA utilised is analysed between early
retirement and redundancy costs. Pension Costs for early retirement reflecting the single
lump sum to buy over the full liability are the capitalised cost.
8. Only RPA provision should go in the RPA column, other staff related provision should be
included within other or have individual column if significant.
9. As per Circular HSC(F) 57/2010 http://www.dhsspsni.gov.uk/hsc-f-2010-57.pdf
estimates provided by DLS in all areas of law including clinical negligence, employers
liability, public liability and employment law all cover the following cost elements –
damages, plaintiffs solicitors and defence costs (i.e. counsel and expert fees) but not the
cost of the services provided by DLS.
Expected Timing of Cash Flows
Following the provisions table, there must be a disclosure of the expected timing of cash
flows resulting from the provisions. These should be analysed as follows ‘not later than
one year’, ‘later than one year and not later than 5 years’ and ‘later than five years’. The
total should equal the provision at 31 March xxxx.
Also for each class of provision, the following must be disclosed:
•
an indication of the uncertainties about the timings and amounts;
•
any major assumptions made concerning future events; and
•
the amount of any expected reimbursements in respect of provisions.
Note 17: Capital Commitments
1.
The purpose of this note is to identify amounts committed in relation to future capital
developments. Planned developments should be categorised as "contracted" where there
is a contractual obligation to proceed. There is no need to show commitments in respect
of uncompleted schemes which would previously have been shown under the heading
"Authorised by the Board, but not contracted" where the Organisation Board has approved
the scheme but no contractual obligation was entered into by the end of the financial year.
2.
The estimated cost of the commitment should be shown. With the exception of the first
year of operation comparative figures relating to the previous year should also be shown.
3.
Organisations should provide a narrative for committed material projects indicating the
likely timescale of the project and the method of finance.
Note 18: Leases Commitments
This note shows the commitments under leases analysed between operating leases and finance
leases.
Note 18.1 Operating leases
1. In accordance with IAS 17, lessors must disclose the following;
(a)the future minimum lease payments under non-cancellable operating leases in the
aggregate and for each of the following periods:
(i)
not later than one year;
(ii)
later than one year and not later than five years;
(iii)
later than five years.
2. Obligations under operating leases must be disclosed separately over the categories land,
buildings and other. Where the amount that would be recognised for the land element is
immaterial, the land and buildings may be treated as a single unit for the purpose of lease
classification.
Note 18.2 (first table) Finance Leases
1. In accordance with IAS 17, Lessees shall make the following disclosures;
(a) for each class of asset the carrying amount at the end of the reporting period.
(b) Organisations must analyse future lease obligations between amounts due within one
year, between one and five years and after 5 years. The gross payments should be
stated with a deduction for future interest.
2. Within one/between one and five/after five years. Minimum lease payments should be
analysed over the time periods shown in the pro forma note. In most cases, the
payments will be those given in a standard leasing agreement. Where an agreement
provides for possible variations in the periodic payments, then the values are the
minima payable under the lease.
Note 18.2 (second table) Present Value of obligations under finance leases
1. Organisations must analyse the present value of the net obligation between amounts due
within one year, between one and five years and after 5 years, for each class of asset.
This table shows just the capital element being repaid, with the interest/discount
element excluded, representing the present liability relating to the asset. The total
should agree to the total of the present value of obligations in the table described above.
Notes to the Financial Statements (Note 18.2 continued)
Lessor obligations
2. Under IAS 17 paragraph 56 HSC bodies must disclose the same level of information
about lessor activities (e.g. Health Centres if a lease agreement exists, leased cars, farm
land, mobile phone masts etc.) as disclosed in Note 18.1 for commitments under leases
taken out by the Trust. Include similar disclosure as for operating leases.
Note 19: Commitments under PFI and other service concession arrangements
This note is in two parts. The first analyses PFI and other service concession arrangement
schemes which have been deemed to be off-balance sheet (SoFP) and the second analyses the
‘service’ element of those schemes deemed to be on balance sheet (SoFP). Organisations may
have schemes under both headings.
Note 19.1: PFI and other service concession arrangement schemes deemed to be off-balance
sheet (SoFP)
For each relevant PFI contract and other service concession arrangement, this note should
•
State what the contract is for and note that the property is not an asset of the (name of
org);
• the estimated capital value of the project;
• give details of any prepayments, revisionary interests etc and how they are accounted
for;
• disclose the total payments for off balance sheet (SoFP) service concessions broken
down by payment period.
Where a PFI and other service concession arrangement transaction does not result in any items
being recognised in the balance sheet (SoFP), the transaction may give rise to guarantees,
commitments or other rights and obligations which, although not sufficient to require recognition
of an asset or liability, requires disclosure in order that the financial statements give a true and fair
view.
Note 19.2: ‘Service’ element of PFI and other service concession arrangement schemes
deemed to be on-balance sheet (SoFP)
For each relevant PFI contract and other service concession arrangement, this note should
•
•
Note what the contract is for and note that under IFRIC 12 the asset is treated as an
asset of the Organisation;
Note that the substance of the contract is that the Organisation has a finance lease and
that payments comprise 2 elements- imputed finance lease charges, and service
charges and provide details of the imputed finance lease charges in the first table at
note 19.2. This discloses the cost of repaying both the capital element of the lease and
the interest i.e. what will hit revenue. The interest element is then removed to
reconcile with the second table (described below).
Notes to the Financial Statements (Note 19.2: continued)
Present Value of Obligations under on balance sheet (SoFP) service concession
arrangements (second table at note 19.2)
The net present values should be disclosed between amounts due within one year, between one
and five years and after 5 years This table shows the capital element being repaid, with the
interest/ discount element excluded, representing the present liability relating to the asset. The
total should agree to the total of the present value of obligations in the table described above.
Note 19.3 Charge to the Statement of Comprehensive Net Expenditure and future
commitments
This is the amount charged to operating expenses in respect of off balance sheet (SoFP) PFI and
other service concession arrangement transactions and the service element of on balance sheet
(SoFP) PFI and other service concession arrangement transactions and the payments to which the
organisation is committed analysed by the period during which the commitment expires. This
effectively shows the cost to the organisation of the services being provided by the operator of the
assets and provider of the services.
Note 20: Other Financial Commitments
The Organisation should note its commitments into non cancellable contracts other than leases
and PFI and other service concession arrangements stating what service is being provided. The
payments to which the Organisation is committed should be analysed in note 20 by the period
during which the commitment expires.
Note 21: Financial Guarantees, Indemnities and Letters of Comfort
Financial instruments
1. IAS 32, 39 & IFRS 7 Financial Instruments: Disclosure, recognition and
Presentation establishes principles for presenting financial instruments as liabilities or
equity and for offsetting financial assets and financial liabilities. In the public sector
context public dividend capital is not an equity instrument and should be presented as
financing in the Statement of Financial Position.
2. The standard defines a financial instrument as a contract that gives rise to a financial asset
of one entity and a financial liability or equity instrument of another entity. A financial
asset is, mainly, an asset that is either cash, or an equity instrument of another entity, or a
contractual right to receive cash or another financial asset from another entity. Examples
include investments, loans, receivables and cash.
3. A financial liability is a liability that is, mainly a contractual obligation to deliver cash to
another entity or to exchange financial assets or liabilities on unfavourable terms.
Examples include payables and provisions that are subject to contracts
Notes to the Financial Statements (Note 21 continued)
4. Because of the relationships with HSC Commissioners, and the manner in which they are
funded, financial instruments play a more limited role within Organisations in creating
risk than would apply to a non public sector body of a similar size, therefore Organisations
are not exposed to the degree of financial risk faced by business entities. Organisations
have limited powers to borrow or invest surplus funds and financial assets and liabilities
are generated by day to day operational activities rather than being held to change the risks
facing the Organisations in undertaking activities. Therefore the HSC is exposed to little
credit, liquidity or market risk.
5. Where the Organisation is exposed to risk the appropriate IFRS 7 disclosures should be
made. Disclosures should be given only where they are necessary because the
Organisation holds financial instruments that are complex or play a significant medium to
long term role in the financial risk profile of the Organisation. The headings in IFRS 7
should be used to the extent that they are relevant. Where an Organisation does not
face significant medium to long term financial risks, then it is sufficient to make a
statement to that effect, (silence is not an option).
6. IFRS 7 Financial Instruments: Disclosures requires entities to provide disclosures in
their financial statements that enable users to evaluate:
•
The significance of financial instruments for the entity’s financial position and
performance; and
•
The nature and extent of risks arising from the financial instruments to which the
entity is exposed during the period and at the year end and how the entities manage
those risks.
The pro forma accounts should be added to where to do so would aid the understanding of the
impact and potential impact of financial instruments.
Financial Guarantees, Indemnities and Letters of Comfort
The Organisation should note if it has entered into any quantifiable guarantees, indemnities or
provided letters of comfort. None of these is a contingent liability within the meaning of IAS 37
since the likelihood of a transfer of economic benefit in settlement is too remote. They therefore
fall to be measured following the requirements of IAS 39. The full potential costs of such
contracts must be reported. These costs are reproduced in the table at note 21.
If the HSC body has no such financial guarantees, a note should be made to this effect.
Note 22: Contingent Liabilities
1.
The purpose of this note is to disclose material contingent liabilities and gains where
they are not accrued or provided for in the accounts and where there is uncertainty
as to the eventual outcome. The identification and accounting treatment accorded to
such liabilities should be in accordance with IAS 37 “Accounting for Provisions,
Contingent Liabilities and Contingent Assets”.
2.
Organisations should indicate the nature of each contingency and should estimate or
state the value of the liability and should outline the grounds for uncertainty
affecting the eventual outcome.
3.
The pro forma note describes contingencies in relation to clinical negligence; other
contingencies should be disclosed in a consistent format.
4.
If there are no contingent liabilities or gains, this should be stated.
5.
The identification and accounting treatment of contingent liabilities should be in
accordance with the guidance in IAS 37.
Content
6.
In all cases the disclosure should give:
•
•
•
•
7.
a brief description of the nature of the contingent liability or asset, and, where
practicable:
an estimate of the financial effect;
an indication of the uncertainties relating to the amount or timing of cash
flows; and
(contingent liabilities only) the possibility of a reimbursement.
Where any of this information is not disclosed because it is impracticable to do so,
that fact must be stated. In extremely rare cases where disclosure of the
information could be expected to seriously prejudice the position of the
Organisation, the general nature of the dispute should be disclosed, together with
the fact that, and the reason why, the usual information has not been disclosed.
Note 23: Related Party Transactions
Related Party Disclosures.
The purpose of this section is to comply with the requirements of IAS 24 - The objective of IAS
24 is to ensure that an entity’s financial statements contain the disclosures necessary to draw
attention to the possibility that its financial position and income and expenditure position may
have been affected by the existence of related parties and by transactions and outstanding
balances with such parties.
Interpretation of IAS 24 for the public sector context.
In applying IAS 24, entities should be aware of the following interpretations for the public
sector context:
a) for the purposes of IAS 24.9(a), the related party will be
•
•
the names of the chairman and chief executive; and
the composition of the management board (including advisory and nonexecutive members) having authority or responsibility for directing or
controlling the major activities of the entity during the year. This means those
who influence the decisions of the entity as a whole rather than the decisions
of individual directorates or sections with the reporting entity
b) charitable NDPBs may apply the general principle of exemption from related party
disclosure in respect of trustees acting as agents of the charity, in accordance with the
parameters contained within the Charities SORP;
c) entities should give details of material transactions between the entity and individuals
who are regarded as related parties;
d) the requirement to disclose the compensation paid to management, expense
allowances and similar items paid in the ordinary course of an entity’s operations
will be satisfied by the disclosures made in the notes to the accounts and in the
Remuneration Report; and
e) in considering materiality, regard should be had to the definition in IAS 1, which
requires materiality to be judged “in the surrounding circumstances”. Materiality
should thus be judged from the viewpoint of both the entity and the related party.
Note 24: Third Party Assets
1. Third party assets are assets for which an entity acts as custodian or trustee but in which
neither the entity nor government more generally has a direct beneficial interest. Third
party assets are not public assets, and should not be recorded in the primary financial
statements. Nor should third-party monies be held in public bank accounts. An example
would include money held on behalf of patients. These should be excluded from the
accounts.
2. In the interests of general disclosure and transparency, any third party assets should be
reported by way of note. The note should differentiate between:
•
third party monies and listed securities: the minimum level of numerical
disclosure required is a statement of closing balances at financial year-end. For
listed securities, this will be the total market value. Optionally, when considered
significant by the entity and at its discretion, further disclosures may be made,
including gross inflows and outflows in the year and the number and types of
securities held;
•
third party physical assets and unlisted securities: disclosure may be by way of
narrative note. For physical assets, the note should provide information on the
asset categories involved. Such disclosure should be sufficient to give users of the
financial statements an understanding of the extent to which third-party physical
assets and unlisted securities are held by the entity; and
•
in the event that third party monies are found to have been in a public bank
account at the end of an accounting year, commentary should be included in the
note on cash at bank and in hand and in the disclosures above on the amount of
third party monies held in the bank account.
Note 25: Financial Performance Targets
Note 25.1: Revenue Resource Limit
1. The Revenue Resource Limit (RRL) is a resource budget set by the Department
annually to cover ongoing operations and HSC organisations will be required to
contain their net expenditure within this limit and report on any variation from the
limit as set. It is a financial target to be achieved and not part of any double entry
accounting system. It is a combination of agreed funding by commissioners,
DHSSPS and other Departments.
2. Non cash RRL:
•
•
•
•
•
•
•
Depreciation for tangible assets (as per note 4).
Amortisation –intangible assets (as per note 4)
Impairments – impairments (as per note 4)
Loss on disposal of property, plant and equipment (as per note 4)
Notional audit fees- this is per operating costs in note 4
All provisions – movement in all provisions (arising, not required written back and
unwinding)
Profit on disposal of property, plant and equipment (as per notes 4 and 5) – this
will reduce the RRL
3. Contracts accounted for under IFRIC 12/ Service concession agreements
If an entity has a PFI contract or other service concession arrangement which is accounted
for under IFRIC 12 such that for accounting purposes it is capital and on balance sheet
(SoFP), but for budgeting purposes it is revenue. The revenue RRL that is reflected on the
Statement of Comprehensive Net Expenditure account will need to be reduced to exclude
the budget cover.
Note 25.2: Capital Resource Limit
The Organisation is given a Capital Resource Limit which it is not permitted to overspend.
£’000
Gross Capital Expenditure
x
(charge against the CRL)
Receipts from sales of fixed assets up to NBV
(x)
Capital Resource Limit
x
(Over)/Under spend against CRL
(x)/x
The overspend was caused by (please specify)
Contracts accounted for under IFRIC 12
If an entity has a PFI contract or other service concession arrangement which is accounted for
under IFRIC 12 such that for accounting purposes it is capital and on balance sheet (SoFP), but
for budgeting purposes it is revenue. The capital expenditure will need to be reduced by this
IFRIC 12 expenditure.
25.3: Break Even Performance
Organisations are required to break even on an annual basis – this had been defined as
containing net expenditure to within 0.25% of Revenue Resource Limits.
BSO/NIBTS
Given that the majority of income for BSO/NIBTS is generated through contracts with other
bodies, rather than through RRL, it is recognised that measurement of breakeven as a
percentage of RRL would not be practical. Therefore it has been agreed that the calculation
around the tolerance level will be based on RRL plus income from activities (note 5.1)
At note 25.3, a full narrative explanation must be given for a material surplus or deficit for the
reporting year and for a material cumulative net surplus or deficit.
The explanation should explain why the surplus/deficit has arisen and the plans (actions and
timescales) to restore the Organisation's break even position.
Note 26: Analysis of Losses and Special Payments
1.
The purpose of this note is to summarise Losses and Special Payments which, under
Government Accounting procedures, are subject to specific approval and write-off
procedures.
2.
HSC(F)50/2012, http://www.dhsspsni.gov.uk/hscf-2012-50.pdf relates to Losses and
Special Payments (including compensation payments) and contains guidance on matters
such as:
(a) categories;
(b) approval procedures for those which exceed delegated limits;
(c) accounting treatment for disclosure.
3.
The losses statement is a memorandum statement and does not form part of the double
entry process. The loss will be borne in the appropriate expense or income heading.
4.
The note should reflect Losses and Special Payments recognised in the year. Where an
item is recognised but approval for write off has not been obtained, a note should be
inserted at the foot of the statement.
5.
Under or overestimates should be adjusted in succeeding years.
6.
Supplementary notes may be added beneath the statement to explain the nature of any
large loss.
7.
Organisations should add to the list provided in Note 26, any other material categories of
loss (materiality being viewed in relation to total value of losses).
8.
The amounts included for compensation claims should reflect the settlement in the year.
9.
It should be noted that interest and compensation payments under the late Payment of
Commercial debts Regulations 2002 are classed as fruitless payments (made because
there is an obligation to make but for which no benefit is received) and as such should
be recorded as a loss. These payments should be included within the section “Nugatory
and fruitless payments” (please refer to circular HSC(F) 53/2010
http://www.dhsspsni.gov.uk/hsc-f-2010-53.pdf which was issued on 16 November
2010).
10.
Details of all individual cases of over £250,000 should be listed separately, detailing the
number of cases and the total paid. The list of cases need only be provided for the current
year but comparatives should be given for category totals. Where the headings are not
appropriate they do not need to be disclosed.
Note 26.1: Special Payments
1. This note provides details of special payments during the financial year not covered by the
above, for example extra statutory or extra regulatory payments. The total amounts of all
special payments must be noted, as should gifts (resources donated to third party for no
payment or a payment less than its market value).
Note 26.2: Other Payments
1.
This note provides details of any other payments not covered by 26 or 26.1 above.
Note 27: Post Balance Sheet Events
1. The objectives of IAS 10 are to prescribe when an entity should adjust its financial
statements for events after the reporting period and what disclosures should be given
about events after the reporting period, and to require disclosure of the date when the
financial statements are authorised.
2. Organisations are required to disclose in this note to the accounts events of the type
described in IAS 10. Organisations should provide a narrative on each such event stating
its nature and giving an estimate of the financial effect or a statement that is not
practicable to make such an estimate where this is the case. IAS 10 should be consulted
for further guidance on definition and disclosure.
3. If there are no material Post Balance Sheet Events this should be stated in the note.
Note 28: Date Authorised for Issue
The following interpretations of IAS 10 for the public sector context apply:
1. The date of the Accounting Officer’s authorisation for issue of the financial statements
of the reporting entities covered by this Manual should be the same date as the
Comptroller and Auditor General signing date. The date of authorisation for issue must
be included as the last note of the accounts, i.e. after the Post Balance Sheet Events
note.
The statement should read “The Accounting Officer authorised these financial statements for
issue on [insert date of issue].”

SECTION B: HSC ANNUAL ACCOUNTS FORM & CONTENT OF THE ACCOUNTS

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SECTION B: HSC ANNUAL ACCOUNTS FORM &amp; CONTENT OF THE ACCOUNTS

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SECTION B: HSC ANNUAL ACCOUNTS FORM & CONTENT OF THE ACCOUNTS