because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates.
The items in the council's Balance Sheet at 31 March 2026 for which there is a significant risk of material adjustment in the forthcoming financial year are as follows:
| Item | Uncertainties | Effect if Actual Results Differ from Assumptions |
|---|---|---|
| Pensions Liability | Estimation of the net liability to pay pensions depends on a number of complex judgements relating to the discount rate used, the rate at which salaries are projected to increase, changes in retirement ages, mortality rates and expected return on pension fund assets. A firm of actuaries is engaged to provide the council with expert advice about the assumptions to be applied and these are documented within the disclosure note on retirement benefits. | The effects on the net pension liability of changes in individual assumptions can be measured. For instance, a 0.5% increase in the discount rate assumption would result in a decrease in the pension liability of £101.442m. However, the assumptions interact in complex ways. |
| Property, Plant and Equipment | The council employs Royal Institute of Chartered Surveyors (RICS) qualified valuers (Lambert Smith Hampton) to identify the most appropriate valuation techniques to determine fair value for all council dwellings, land and buildings. All valuations are carried out in accordance with the methodologies and bases for estimation set out in the professional standards of the RICS. The council's valuation experts work closely with finance officers on a regular basis regarding all valuation matters. | Significant changes in any of the unobservable inputs used in the techniques used would result in a significantly lower or higher fair value measurement for these assets. For every 1% increase in valuation, the carrying value of property, plant and equipment would increase by £25m. |
The Accounting Code (Standard IAS 1) requires management to assess the council's ability to continue as a going concern and to disclose any material uncertainties related to events or conditions that may cast significant doubt upon the entity's ability to continue as a going concern. The council discloses that the Accounts have been prepared on a going concern basis and that the council will continue in existence for the foreseeable future.
This assumption is made because the local authorities carry out functions essential to the local community and are themselves revenue-raising bodies (with limits on their revenue-raising powers at the discretion of central government). If an authority were in financial difficulty, the prospects are that alternative arrangements might be made by central government in the form of exceptional financial support which allows for the continuation of the services it provides through the capitalisation of revenue expenditure which allows the