VOCABULARY flashcards for Workbook 2: Preparation of National Health Service accounts

Vocabulary flashcards covering key terms from the NHS Workbook 2 topics, including NHSFT structure, capital, assets, IFRS, and PDCD calculations.

NHS Foundation Trust (NHSFT)

Public benefit corporation in England that provides healthcare; operates under a Foundation Trust Licence and is the NHS provider framework studied in PSFR.

Public Dividend Capital (PDC)

Capital invested in an NHSFT by the Department of Health and Social Care to finance net assets; can be advanced or repaid and earns dividends.

Public Dividend Capital Dividends (PDCD)

The return paid to the government on PDC investments; typically calculated as a percentage of average relevant net assets (commonly 3.5%).

PDCD charge (PDCD dividends expense)

The expense recognised in the SoCI for the PDCD dividend due; used to determine the PDCD payable amount.

Arm (Annual Reporting Manual, ARM)

NHS England guidance on form and content of NHS foundation trust annual reports and accounts.

GAM (Group Accounting Manual)

Guidance from the Department of Health and Social Care on how IFRS is interpreted for NHSFTs, including group accounts.

FReM (Financial Reporting Manual)

HM Treasury manual interpreting IFRS for central government use; basis for NHSFT reporting policies.

IFRS

International Financial Reporting Standards; the accounting framework used and interpreted by GAM/FReM for NHS bodies.

IAS 16 (Property, Plant and Equipment)

Standard governing non-current tangible assets; requires depreciation and, for many NHS assets, a revaluation model.

Current Value in Existing Use (Current Value in Existing Use, CVEIU)

Present value of an asset’s remaining service potential in its current use; used to value qualifying assets under IAS 16 in NHS.

Revaluation Reserve

Equity reserve created when assets are revalued upward; used to absorb revaluations and impairments before affecting the SoCI.

Historical Cost Adjustment (HCA)

Transfer from the revaluation reserve to the income and expenditure reserve to reflect depreciation differences after revaluation.

Depreciation

Systematic allocation of the cost of a non-current asset over its useful life; recognised as an expense.

de minimis level (£5,000)

Threshold below which expenditure is not capitalised; assets above it can be capitalised unless grouped as inter-dependent.

Donated assets (IAS 20)

Assets donated to an NHSFT; recognized in asset accounts and, if no conditions, reflected in income; related grants may create liabilities if conditions apply.

Government grants (IAS 20/IPPSAS)

Donations or grants from government for assets; recognition depends on conditions; often treated like donated assets for asset accounting.

Contract liabilities (IFRS 15)

Liability for consideration received before performance obligations are satisfied, e.g., partially completed healthcare episodes.

Integrated Care System (ICS)

A partnership framework across NHS bodies, local authorities, and others to plan and deliver health and care across a geography.

Integrated Care Partnerships (ICPs)

Statutory committees within an ICS that develop health and care strategies across partners.

Integrated Care Boards (ICBs)

Statutory bodies within an ICS responsible for planning and funding most NHS services in their area.

Average relevant net assets (ARNA/ARNA PDCD calculation)

Simple average of opening and closing NRA, adjusted for donated assets, cash held with GBS, and prepayments; used to compute the PDCD.

Non-current asset table (NCA table)

Working table/tableau used to track PPE categories (land, buildings, equipment, AUC, donated) and NBVs with related entries.

SoCI, SoFP, SoCTE

Statement of Comprehensive Income; Statement of Financial Position; Statement of Changes in Taxpayers’ Equity—key NHSFT financial statements.

Temporary impairment (IAS 36)

Impairment recognized when impairment is temporary; may be charged to revaluation reserve up to its balance, with remainder to SoCI if needed.

Permanent impairment (IAS 36)

Impairment charged in full to the SoCI; corresponding revaluation reserve transfers to I&E reserve where applicable.

IFRS 15 – Revenue from contracts with customers

Standard for recognising revenue from contracts; for NHSFTs, includes partially completed episodes and contract liabilities.

IFRS 10/11/IAS 28 (group accounts context)

IFRS guidance used when NHSFTs elect or are required to present group accounts; IAS 28 covers equity method for associates.

Public Banking Service (GBS)

Government Banking Service; NHS funds are held there for cash management purposes.

Integrated policy terms (Commissioning vs Providing)

Key NHS terminology for understanding who pays whom for services and how performance is measured in contracts.