Annual Report and Financial Accounts 2010/11


Accounting Policies


Existing Use Value for non-specialised operational property. The value of land for existing use purposes is assessed at Existing Use Value. For non-operational properties including surplus land, the valuations are carried out at Open Market Value.


Increases in asset values arising from revaluations are recognised in the revaluation reserve, except where, and to the extent that, they reverse an impairment previously recognised in operating expenses, in which case they are recognised in operating income.


Decreases in asset values and impairments are charged to the revaluation reserve to the extent that there is an available balance for the asset concerned, and thereafter are charged to operating expenses.


Gains and losses recognised in the revaluation reserve are reported in the Statement of Comprehensive Income as an item of ‘other comprehensive income’.


Items in the course of construction are valued at current cost, larger schemes are valued by the district valuer on completion or when brought into use and all schemes are valued as part of the three / five yearly revaluation.


Operational equipment is valued at net current replacement cost.


Subsequent expenditure


Where subsequent expenditure enhances an asset beyond its original specification, the directly attributable cost is added to the asset’s carrying value. Where subsequent expenditure is simply restoring the asset to the specification


assumed by its economic useful life then the expenditure is charged to operating expenses.


Depreciation, Amortisation and Impairments


Land is considered to have an infinite life and is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives as follows


Medical Equipment 5 - 10 Years


IT Equipment / Software 3 - 5 Years Radiology Equipment 5 - 7 Years Furniture / Fittings Vehicles


Set-up Costs


10 Years 7 Years 10 Years


Buildings and Dwellings 10 - 90 Years


The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each Statement of Financial Position date.


The assets carrying amount is written down immediately to its recoverable amount if the assets carrying amount is greater than estimated recoverable amount.


Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within ‘Operating Expenses’ on the Statement of Comprehensive Income.


When revalued assets are sold, the amounts included in other reserves are transferred to the Retained Earnings Reserve.


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