Abbreviated Company Accounts - CANOE SPORT LIMITED

1Accounting Policies

Basis of measurement and preparation of accounts
The accounts have been prepared under the historical convention and in accordance with the Financial Reporting Standard for Smaller Entities (effective April 2008). At the balance sheet date the company's liabilities exceeded its assets. The company has received assurance from the director that he will continue to give financial support to the company for twelve months from the date of signing these financial statements. On this basis, the director considers it appropriate to prepare the accounts on a going concern basis. However should the financial support mentioned above not be forthcoming, the going concern basis used in preparing the company's accounts may be invalid and adjustments would have to be made to reduce the value of assets to their realisable amount and to provide for any further liabilities which might arise. The accounts do not include any adjustments to the company's assets or liabilities that might be necessary should this basis not be appropriate.

Turnover policy
Turnover represents the value of goods dispatched during the year. The value is calculated at selling price net of discounts and Value Added Tax.

Tangible assets depreciation policy
Tangible fixed assets are stated at cost less depreciation. Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, on a reducing balance basis, over the useful economic life of that asset as follows: plant and machinery - 15% per annum; fixtures, fittings and equipment - 25% per annum.

Valuation information and policy
Stock comprises goods purchased for resale and is stated at the lower of cost and net realisable value. Cost is purchase price less trade discounts, calculated using the first-in, first-out method. Net realisable value is calculated as selling price less selling and distribution costs.

Other accounting policies
Deferred tax arises as a result of including items of income and expenditure in taxation computations in different periods from those in which they are included in the company's accounts. Deferred tax is provided in full on timing differences which result in an obligation to pay more (or a right to pay less) tax at a future date, at the rates that are expected to apply when the timing differences reverse, based on current tax rates and laws. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered.
Rentals under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease.