Annual Report and Financial Accounts 2010/11
Accounting Policies 1.4 Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Finance Committee that makes strategic decisions.
1.5 Income recognition
The main source of revenue for the Foundation Trust is under contracts from commissioners in respect of healthcare services. Revenue is recognised in the period in which services are provided. Where income is received for a specific activity which is to be delivered in the following financial year, that income is deferred.
The Foundation Trust recognises revenue when the the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Foundation Trust and when specific criteria have been met for each of the activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the activities have been resolved.
(a) Patient Related Revenue Revenue is recognised when the service has been delivered, that is, in the period when the service was provided. At year end, a revenue estimate is recognised for patients who are in hospital and have not completed their period of treatment (incomplete spell).
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(b) Education and Training Revenue is recognised when the conditions of education and training contracts have been met.
(c) Non Patient Care Services This is the income for the funding of education and training for specific staff groups. Income is recognised when the Foundation Trust has achieved its objectives as set out in the annual contract.
(d) Interest Interest revenue is accrued on a time basis, by reference to the principal outstanding and interest rate applicable.
(e) Catering services The Foundation Trust operates canteen services for employees and patients. Revenue is recognised when the Foundation Trust sells to the employees and the public. Canteen sales are usually by cash or by debit card.
(f) Rental income The Foundation Trust owns some residential properties which are let out to members of staff and related parties. Rental income is recognised on a straight-line basis over the term of the lease. Car park fees are recognised when the public have used the Foundation Trust’s facilities, usually by cash.
(g) Income from Sales of non-current assets Income from the sale of non-current assets is recognised only when all material conditions of sale have been met, and is measured as the sums due under the sale contract.
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