5.1.9 On receipt of the CCEs, the Executive will calculate the overall funding requirements to meet NHS capital charges. Following the national revaluation exercise, HA funding baselines were re-based in respect of capital charge changes that arose from price movements. In principle, volume changes do not give rise to re-basing.
5.1.10 It is to be expected that NHS trusts will find the task of estimating capital charges demanding and time consuming: asset acquisitions, disposals, revaluations, impairments and reviews of economic life and residual values all impact, and need to be predicted up to 19 months ahead. The potential for inaccuracy in estimates has increased with the necessity to annually review equipment lives and to consider impairments under FRS 11 & 15. It is important however to make realistic estimates of capital charges, as the PDC dividend is set on these calculations, and NHS trusts will be required to pay this cash sum in the course of the year. NHS trusts are also required to report actual achievement against the capital cost absorption target of 6% in their annual accounts.