Abbreviated Company Accounts - FARONTONE LIMITED

1Accounting Policies

Basis of measurement and preparation of accounts
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain fixed assets, and in accordance with the Financial Reporting Standard for Smaller Entities (effective April 2008).

The directors note the net current liabilities position as at 30 September 2014 of which £5,048 is owed to them. The directors will not seek repayment of the loans until such time as the company can afford to repay them. Based on this and the anticipated financial performance after the balance sheet date the directors are confident that the company can meet its obligations as and when they fall due and therefore have prepared the financial statements on a going concern basis.

Turnover policy
The turnover shown in the profit and loss account represents rental income receivable during the year, exclusive of Value Added Tax.

Tangible assets depreciation policy
Fixed assets

All fixed assets are initially recorded at cost.

Depreciation

Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:

Furniture & Equipment - 33.3% straight line

Other accounting policies
Investment properties

Investment properties are shown at their open market value. The surplus or deficit arising from the annual revaluation is transferred to the investment revaluation reserve unless a deficit, or its reversal, on an individual investment property is expected to be permanent, in which case it is recognised in the profit and loss account for the year.

This is in accordance with the Financial Reporting Standard for Smaller Entities (effective April 2008) which, unlike the Companies Act 2006, does not require depreciation of investment properties. Investment properties are held for their investment potential and not for use by the company and so their current value is of prime importance. The departure from the provisions of the Act is required in order to give a true and fair view.

Operating lease agreements

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease.

Deferred taxation

Deferred tax is recognised in respect of all timing differences that have originated but not yet reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or receive more, tax.

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

TRANSACTIONS WITH THE DIRECTORS

During the year the company also operated a directors current account on behalf of Mr K M S Hodgkins. The balance owed was repaid in full before the year end.

The land and buildings, all of which are investment properties, were revalued on 30 September 2014 to market value, based on the directors' estimates.

The original cost of the properties is £148,772 (2013: £148,772).