The Christie NHS FT Annual Report & Accounts 2019-20

Intangible assets acquired separately are initially recognised at historical cost. Internally-generated assets are recognised if, and only if, all of the following have been demonstrated: ● the technical feasibility of completing the intangible asset so that it will be available for use; ● the intention to complete the intangible asset and use it; ● the ability to use the intangible asset; ● how the intangible asset will generate probable future economic benefits; ● the availability of adequate technical, financial and other resources to complete the intangible asset and use it; ● the ability to measure reliably the expenditure attributable to the intangible asset during its development. Software which is integral to the operation of hardware e.g. an operating system, is capitalised as part of the relevant item of Property, Plant and Equipment. Software which is not integral to the operation of hardware e.g. application software, is capitalised as an intangible asset.

1.5.2 Measurement

Intangible non-current assets held for operational use are valued at historical cost less accumulated amortisation. The carrying value of intangible assets is reviewed for impairment at the end of the first full year following acquisition and in other periods if events or changes in circumstances indicate the carrying value may not be recoverable.

Where no active market exists, intangible assets are valued at the lower of depreciated replacement cost and the value in use where the asset is income generating.

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the criteria above are initially met. Where no internally-generated intangible asset can be recognised, the expenditure is charged to the Statement of Comprehensive Income (SOCI) in the period in which it is incurred.

1.5.3 Amortisation

Intangible assets are amortised on a straight line basis over their expected useful economic lives or, in the case of software licences, over the term of the licence where this is shorter.

1.6 Donated assets

Donated and grant funded Property, Plant and Equipment assets are capitalised at their fair value on receipt. The donation/grant is credited to income at the same time, unless the donor has imposed a condition that the future economic benefits embodied in the grant are to be consumed in a manner specified by the donor, in which case, the donation/grant is deferred within liabilities and is carried forward to future financial years to the extent that the condition has not yet been met. The donated and grant funded assets are subsequently accounted for in the same manner as other items of Property, Plant and Equipment.

1.7 Government grants

Government grants are grants from Government bodies other than income from commissioners or NHS trusts for the provision of services. Where a grant is used to fund revenue expenditure it is taken to the Statement of Comprehensive Income to match that expenditure.

1.8 Research

The revenue cost of personnel, consumables, etc. engaged in research and development activities is shown as direct expenditure of the Trust. Some of these activities are funded through charitable sources and therefore an amount corresponding to the expenditure charged to the SOCI is included in operating income from charitable and other contributions to expenditure. Research and development expenditure is charged against income in the year in which it is incurred, except insofar as development expenditure relates to a clearly defined project and the benefits of it can reasonably be regarded as assured.

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