Annual Report 2016 - Page 63

Annual Report 2016 Notes to the Financial Statements Principal accounting judgements, estimates and assumptions In the application of the accounting policies, which are described above, the Directors are required to make judgements, estimates and assumptions in respect of the carrying amounts of assets and liabilities recognised in the financial statements. These are based on historical experience, future forecasts and other factors that are considered to be relevant. It is recognised that historical experience and forecasts change over time and these judgements, estimates and assumptions are therefore reviewed and amended where necessary on a regular basis. However, it is also recognised that the actual outcomes may still differ to the judgements, estimates and assumptions made. Provided below are details of the principal accounting judgements, estimates and assumptions that the Directors have made when applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements. Accrued income An estimate of water consumption by metered customers of South Staffs Water since