Abbreviated Company Accounts - J & K (CARDIFF) LIMITED

1Accounting Policies

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

The accounts have been prepared on a going concern basis, which assumes the continuing support of the directors, who are the company's main creditors and have given personal guarantees to the bank in respect of the loans.
At the balance sheet date, the company had net liabilities of £38,373 (2013 - £35,435) and is reliant upon financial support from the directors. The properties are unable to generate sufficient income to cover the depreciation charged and in the short term the company will continue to make losses, although cash flow is adequate as long as the mortgages are interest-only. The company has taken on 2 leased properties, one shortly before the year end and the other shortly after, and it is hoped that these will generate income in excess of the lease rentals agreed, so the company should start to become profitable. The mortgages are all secured by the personal guarantee of the directors, as well as on the properties.

The directors consider that in preparing the financial statements they have taken into account all the information that could reasonably be expected to be available. On this basis, they consider that it is appropriate to prepare the financial statements on the going concern basis. This assumes the continued financial support of the directors, who have agreed to defer repayment of their loans until all other company debts are satisfied. The financial statements do not include any adjustments that would result if the directors withdraw their support.

Turnover policy
Turnover comprises amounts receivable in the ordinary course of business from the principal activities of the company, exclusive of value added tax and discounts where applicable.

Tangible assets depreciation policy
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:

Freehold Property - 2% straight line
Fixtures & Fittings - 15% straight line

Other accounting policies
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.

Financial instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities.

Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.