§ Dr. Richard TaylorTo ask the Secretary of State for Health and if he will make a statement on the claim by Worcestershire Health Authority of a loss in value of its fixed assets in its 2000–01 Annual Accounts before the proposed sale of land and demolition of buildings. [20525]
§ Mr. HuttonThe recognised accountancy bodies have a financial reporting standard (FRS11) that requires that an annual review of the buildings, plant and equipment of an organisation be undertaken where a change has occurred or is expected to occur in the use, and therefore the value of, the asset. These financial reporting standards issued by the recognised accountancy bodies are expected to be applied by all commercial organisations in the United Kingdom in the preparation of their annual accounts.
This is known as impairment of fixed assets. FRS11 requires that the accounts should recognise the change in the value immediately.
During the period 2000–01, the Worcestershire Acute Hospitals National Health Service Trust declared that there had been an impairment in the value of the Kidderminster Hospital Bewdley Road site due to the planned reconfiguration of service provision to develop the new diagnostic and treatment centre. The impairment was deemed to have been incurred when the trust's 727W balance sheet was drawn up in June 2001 as there is 'a commitment by the trust's management to undertake significant reorganisation'.