The Christie NHS FT Annual Report & Accounts 2019-20

Consolidated Accounts of The Christie NHS Foundation Trust 2019-2020 Notes to the Accounts

1. Accounting Policies

NHS Improvement, in exercising the statutory conventions conferred on Monitor has directed that the financial statements of NHS foundation trusts shall meet the accounting requirements of the Department of Health and Social Care Group Accounting Manual (DH GAM) which shall be agreed with HM Treasury. Consequently, the following financial statements have been prepared in accordance with the DH GAM 2019-20 issued by the Department of Health and Social Care. The accounting policies contained in the GAM follow International Financial Reporting Standards (IFRS) to the extent that they are meaningful and appropriate to NHS foundation trusts, as determined by HM Treasury, which is advised by the Financial Reporting Advisory Board. Where the DH GAM permits a choice of accounting policy, the accounting policy that is judged to be most appropriate to the particular circumstances of the NHS foundation trust for the purpose of giving a true and fair view has been selected. The particular policies adopted are described below. These have been applied consistently in dealing with items considered material in relation to the accounts.

1.1 Accounting Conventions

These accounts have been prepared on a going concern basis, under the historical cost convention modified to account for the revaluation of property, plant and equipment, intangible assets and certain financial assets and financial liabilities. As a direct response to the Covid-19 pandemic, The Christie NHS Foundation Trust, has re-assessed and confirmed its status as a going concern. The Group, including the Trust, The Christie Pharmacy Limited and The Christie Charitable Fund remain a going concern.

1.1.1 Acquisitions and Discontinued Operations

Activities are considered to be 'acquired' only if they are acquired from outside the public sector. Activities are considered to be 'discontinued' only if they cease entirely. They are not considered to be 'discontinued' if they transfer from one NHS body to another.

1.1.2.1 Critical judgements in applying accounting policies

The following are the judgements, apart from those involving estimates (see below) that management has made in the process of applying accounting policies and that have the most significant effect on the amounts recognised in the financial statements. (a) For each Research and Development contract, the Trust transfers control of goods and services over time and therefore, satisfies performance obligations and recognises revenue over time. This may be over several financial years. Research and Development income recognised is in equal value to the cost in the financial year of satisfying the performance obligations. See note 15.

(b) The basis upon which the Modern Equivalent Asset Valuation is assessed for land by the external valuer is the alternative theoretical site.

1.1.2.2 Sources of estimation uncertainty

The following are assumptions about the future and other major sources of estimation uncertainty that have a significant risk of resulting in material adjustment to the carrying amounts of assets and liabilities within the next financial year. (a) Non-current Property, Plant and Equipment asset valuation relating to land and buildings are based on the District Valuers valuation - see note 10. The uncertainty over future changes to estimations of the carrying amount of land and buildings is mitigated by the annual independent valuation of these assets. The estimation methods used by the independent valuer draw upon, but are not limited to, industry recognised building construction indices and relevant or comparable transactions in the market place.

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