Wirral Council Statement of Accounts 2019/20 1 Contents Narrative Report .......................................................................................................................................... 5 Statement of Responsibilities for the Statement of Accounts .................................................................. 27 Independent Auditor’s Report .................................................................................................................. 28 Movement in Reserves Statement ............................................................................................................ 35 Comprehensive Income and Expenditure Statement ............................................................................... 36 Balance Sheet ............................................................................................................................................ 37 Cash Flow Statement ................................................................................................................................. 38 Note 1 - Accounting Policies ...................................................................................................................... 40 Note 2 - Accounting Standards Issued, Not Adopted ............................................................................... 58 Note 3 - Critical Judgements in Applying Accounting Policies .................................................................. 59 Note 4 - Assumptions made about future and other major sources of estimation uncertainty .............. 62 Note 5 - Material Items of Income and Expense ....................................................................................... 64 Note 6 - Events After the Balance Sheet Date .......................................................................................... 64 Note 7 - Expenditure and Funding Analysis .............................................................................................. 65 Note 8 - Adjustments between Accounting Basis and Funding Basis under Regulations ........................ 68 Note 9 - Transfers to/from Earmarked Reserves ...................................................................................... 70 Note 10 - Other Operating Expenditure .................................................................................................... 72 Note 11 - Financing and Investment Income and Expenditure ................................................................ 73 Note 12 - Taxation and Non-Specific Grant Income ................................................................................. 73 Note 13 - Expenditure and Income Analysed by Nature .......................................................................... 74 Note 14 - Property, Plant and Equipment ................................................................................................. 76 Note 15 - Heritage Assets .......................................................................................................................... 79 Note 16 - Investment Properties ............................................................................................................... 81 Note 17 - Intangible Assets ....................................................................................................................... 84 Note 18 - Financial Instruments ................................................................................................................ 85 Note 18a - Financial Instruments – Fair Value .......................................................................................... 88 Note 19 - Debtors ...................................................................................................................................... 91 Note 20 - Debtors for Local Taxation ........................................................................................................ 92 Note 21 - Cash and Cash Equivalents ........................................................................................................ 92 Note 22 - Assets Held for Sale ................................................................................................................... 92 Note 23 - Creditors .................................................................................................................................... 93 Note 24 - Provisions .................................................................................................................................. 93 Note 25 - Usable Reserves......................................................................................................................... 95 Note 26 - Unusable Reserves .................................................................................................................... 96 Note 27 - Cash Flow Statement: Operating Activities ............................................................................. 101 Note 28 - Cash Flow Statement: Investing Activities .............................................................................. 102 Note 29 - Cash Flow Statement: Financing Activities.............................................................................. 102 Note 30 - Reconciliation of Liabilities Arising from Financing Activities ................................................. 103 Note 31 - Trading Operations .................................................................................................................. 103 Note 32 - Agency Services ....................................................................................................................... 104 Note 33 - Pooled Budgets ........................................................................................................................ 104 Note 34 - Members’ Allowances ............................................................................................................. 105 Note 35 - Officers’ Remuneration ........................................................................................................... 106 Note 36 - External Audit Costs ................................................................................................................ 108 Note 37 - Dedicated Schools Grant ......................................................................................................... 109 Note 38 - Grant Income ........................................................................................................................... 110 2 Note 39 - Related Parties ........................................................................................................................ 111 Note 40 - Capital Expenditure and Capital Financing ............................................................................. 115 Note 41 - Leases ...................................................................................................................................... 116 Note 42 - Service Concession Arrangements .......................................................................................... 118 Note 43 - Pension Schemes Accounted for as Defined Contribution Schemes ...................................... 121 Note 44 - Defined Benefit Pension Scheme ............................................................................................ 122 Note 45 - Trust Funds .............................................................................................................................. 127 Note 46 - Contingent Liabilities ............................................................................................................... 127 Note 47 - Nature and Extent of Risks Arising from Financial Instruments ............................................. 127 Note 48 - Restatement of 2018/19 Cost of Services ............................................................................... 131 Collection Fund Statement ...................................................................................................................... 134 Glossary ................................................................................................................................................... 138 Merseyside Pension Fund Accounts ........................................................................................................ 143 Independent Auditor’s Report ................................................................................................................ 144 Notes to the Merseyside Pension Fund Accounts .................................................................................. 150 3 Narrative Report 4 Narrative Report The Statement of Accounts sets out the financial performance of the Council for the 2019/20 financial year and shows the year-end financial position at 31 March 2020. The Statement of Accounts is produced annually to give electors, local taxpayers, Members of the Council, employees, and other interested parties clear information about the Council’s finances. Whilst plain language has been used wherever possible, technical language is required in some areas. To assist with understanding of the accounts a glossary of financial terms has been included at the end of the Statement of Accounts. The narrative report provides a short summary of the Council’s overall financial and non- financial achievements for the year and assists in the interpretation of the financial statements. The narrative report is structured as follows: 1. About Wirral 2. Strategic