St George’s University Hospitals: NHS Fixed Asset and Lease Accounting Case Study

Connecting Fixed Asset and Lease Accounting for NHS Finance

St George’s University Hospitals NHS Foundation Trust selected FMIS Fixed Assets in 2017 to replace an Access-based register with a system that supported its financial reporting requirements and offered flexible asset analysis. The Trust added FMIS Lease Accounting in 2022, extending the system to support its IFRS 16 transition and the relationship between lease records and fixed assets. Both modules now use UK cloud hosting.

Case Study

Industry

NHS and Healthcare

Location

London, United Kingdom

Client Since

2017

Challenges

Asset Data Migration

NHS Financial Reporting

IFRS 16 Lease Accounting

Client Overview: St George’s University Hospitals NHS Foundation Trust provides general and specialist healthcare services in southwest London and beyond. Its main sites include St George’s Hospital in Tooting and Queen Mary’s Hospital in Roehampton. The finance team’s asset records cover a wide-ranging estate, including buildings, medical equipment, IT assets and furniture.

The Challenge: Replacing a Legacy Register While Retaining Financial Detail

The Trust relied on a fixed asset register held in an Access database, which was both unreliable and not user-friendly. When evaluating replacement systems, the finance team wanted straightforward data entry, accessible reporting and enough flexibility to retain the information needed for financial analysis.

A key requirement was to simplify the creation of notes for the annual and management accounts while maintaining a strong audit trail. The register also needed to record depreciation, revaluations and impairments, accommodate corrections and support the Trust’s preferred classifications and cost centre analysis.

Migration also needed to preserve the information the finance team relied on, including descriptions, locations and medical equipment references. Where one financial asset record covered several equipment items, the new register needed to retain those cross-references.

Supporting NHS Compliant Asset Accounting and Reporting

NHS trusts and foundation trusts prepare their annual reports and accounts under the Department of Health and Social Care Group Accounting Manual. Accordingly, the Trust asset register must support the financial information required for reporting, alongside the organisation’s own asset classifications and accounting policies.

For St George’s, this included revaluation balances, depreciation on revalued assets, changes to useful lives and the timing of depreciation. Adding lease accounting later introduced a further requirement: connecting lease liabilities and right-of-use assets to the existing register without duplicating assets already recorded.

Key Requirements

• A user-friendly replacement for the Access-based fixed asset register
• Flexible classifications, descriptions, location fields and cost centre analysis
• Support for statutory reporting, depreciation, revaluations and impairments
• Bulk processing of asset changes with references to supporting working papers
• Data migration, training and ongoing specialist support
• Lease accounting linked to existing fixed asset records for the IFRS 16 transition

Preparing the Asset Data for Migration

A dedicated FMIS consultant helped the Trust prepare its existing records for the new register. Working with the finance team, they agreed the coding structure and how to retain longer descriptions, medical equipment references, locations and cost centres so the data would support the Trust’s reporting and analysis needs.

FMIS provided import templates and guidance on mapping the records, helping to reduce the risk of errors during migration. Practical training also helped the team start using the register for additions and other asset transactions.

Working with the Trust’s Accounting Policies

FMIS helped the Trust configure its asset register around its accounting policies, using quarterly periods and setting depreciation to begin in the quarter after an asset became available for use.

The finance team also had specialist support to apply those policies to postings, transfers, revaluations and changes to useful lives. This included guidance on calculating depreciation after a revaluation and spreading the effect of a useful-life change over the asset’s remaining life.

Extending the System with IFRS 16 Lease Accounting

The Trust added FMIS Lease Accounting in 2022 to support its IFRS 16 transition and link lease records with the associated right-of-use assets in Fixed Assets.

Existing finance leases required particular care because their assets were already on the register. FMIS provided a process for importing these leases, retaining existing asset identifiers and linking records between the two modules. This approach was designed to avoid creating duplicate right-of-use assets.

The finance team also had guidance on reconciling asset values held against lease records with existing net book values, and on how adjustments to a right-of-use asset differed from adjustments to the lease liability.

The Benefits for St George’s Finance Team

St George’s now uses FMIS Fixed Assets and Lease Accounting with UK cloud hosting, having extended its original fixed asset system to include lease accounting.

In their feedback on the fixed asset implementation in 2018, the Trust highlighted several practical benefits:

• Easy to use, with the reporting the Trust needed: FMIS met the Trust’s statutory reporting requirements while offering the user-friendliness the team was looking for.
• Flexible asset analysis: the finance team could structure its asset data around the information it needed to review and report.
• Bulk updates with supporting references: the In Tray allowed the team to process additions, transfers, disposals, revaluations, useful-life changes and adjustments in bulk. The templates also provided a link to the original working papers.
• Straightforward depreciation and revaluation: David described both as easy and accurate on the FMIS register.

David also described migration from the old system as fairly straightforward, saying the helpful and knowledgeable FMIS team made the move easier.

Lessons for Other NHS Asset Accounting Projects

• Define the reporting structure before migration: agree the classifications, location fields, cost centres and references that finance users need.
• Test the accounting detail: work through depreciation timing, revaluation treatment and useful-life changes before relying on the system for reporting.
• Plan for existing leased assets: introducing lease accounting requires a clear approach to linking leases with assets already on the register.
• Combine configuration with practical support: import guidance, training and access to consultants help teams work through detailed implementation questions.

A Long-Term Approach to NHS Asset Accounting

St George’s experience shows how a fixed asset implementation can provide a foundation for later lease accounting work. The original project focused on usability, financial reporting and asset analysis. The subsequent expansion addressed the relationship between lease records, liabilities and existing fixed assets.