Page 145 - Pharmacy Appeals 1/4/04 to 31/3/05

NHS Resolution Annual report and accounts 2021/22 121

1.8. Financial assets 1.10. Critical judgements and key sources
of estimation uncertainty
The simplified approach to impairment, in accordance
with IFRS 9, measures the loss allowance for trade In the application of NFIS Resolution's accounting policies,
receivables, contract assets and lease receivables at an which are described elsewhere in Note 1, the directors are
amount equal to lifetime expected credit losses (stage required to make judgements, estimates and assumptions
1). For other financial assets, the loss allowance is about the carrying amounts of assets and liabilities that
measured at an amount equal to lifetime expected credit are not readily apparent from other sources. The estimates
losses if the credit risk on the financial instrument has and associated assumptions are based on historical
increased significantly since initial recognition (stage 2). experience and other factors that are considered to be
relevant. The judgements that have the most significant
DHSC provides a guarantee of last resort against
effect on the amounts recognised in the financial
the debts of its arm's length bodies and NFIS bodies
statements relate to the calculation of the provisions for
and as such NFIS Resolution does not recognise
known claims and for IBNR, as explained in Note 7.2.

stage 1 or stage 2 losses against these bodies.
1.11. IFRS 8 - operating segments
For financial assets that have become credit impaired
since initial recognition (stage 3), NFIS Resolution NFIS Resolution has one reportable segment
measures expected credit losses at the reporting date as under IFRS 8: income and expenditure are
the difference between the asset's gross carrying amount separated into different scheme types in the
and the present value of the estimated future cash flows Statement of Changes in Taxpayers' Equity.
discounted at the financial asset's original effective
interest rate. Any adjustment is recognised in profit or
loss as an impairment gain or loss. In the current year,
following review of NFIS Resolution debts, we have not
recognised any expected credit loss (nil in 2020/21).
1.9. Financial liabilities
Financial liabilities are recognised in the Statement of
Financial Position when NFIS Resolution becomes a party
to the contractual provisions of the financial instrument
or, in the case of trade payables, when the goods or
services have been received. Financial liabilities are
de-recognised when the liability has been discharged;
that is, the liability has been paid or has expired.
Financial liabilities are initially recognised at fair value.