Page 180 - Pharmacy Appeals 1/4/04 to 31/3/05

156 Financial statements

11. Financial instruments Market risk (including foreign
currency and interest rate risk)
IFRS 7 Financial Instruments: Disclosures requires
disclosure of the role that financial instruments have None of NHS Resolution's financial assets and
had during the period in creating or changing the risks liabilities carry rates of interest. NHS Resolution has
an entity faces in undertaking its activities. Because negligible foreign currency income and expenditure.
of the way Special Health Authorities are financed, NHS Resolution is therefore not exposed to
NHS Resolution is not exposed to the degree of significant interest rate or foreign currency risk.
financial risk faced by business entities. In addition, Credit risk
financial instruments play a much more limited role
As the majority of NHS Resolution's income
in creating or changing risk than would be typical of
comes from contracts with other NHS bodies,
the listed companies to which IFRS 7 mainly applies.
NHS Resolution has low exposure to credit risk.
NHS Resolution has limited powers to borrow or
The maximum exposures are in receivables from
invest surplus funds. Financial assets and liabilities
customers, as disclosed in Note 4: Receivables.
are generated by day-to-day operational activities,
rather than being held to changes within the risks 12. Events after the reporting period
facing NHS Resolution in undertaking its activities.
These financial statements were authorised for
NHS Resolution holds financial assets in the form of NHS
issue on the date that the Comptroller and
and other receivables, and cash, as set out in Notes 4
Auditor General certified the accounts.
and 5 respectively, and financial liabilities in the form of
NHS and other payables, as set out in Note 6. As these
receivables and payables are due to mature or become
payable within twelve months from the Statement
of Financial Position date, NHS Resolution considers
that the carrying value is a reasonable approximation
to fair value for these financial instruments.

Liquidity risk
NHS Resolution's net expenditure is financed from
resources voted annually by Parliament and scheme
contributions from NHS member organisations.
NHS Resolution finances its capital expenditure
from funds made available from Government under
an agreed capital resource limit. NHS Resolution is
therefore not exposed to significant liquidity risks.