Abbreviated Company Accounts - SPACE ELECTRICAL LIMITED

1Accounting Policies

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

Turnover policy
Turnover represents income receivable for goods and services provided in the period, exclusive of Value Added Tax and trade discounts.

Tangible assets depreciation policy
Depreciation of fixed assets
Depreciation has been computed to write off the cost of fixed assets over their expected useful lives at the following rates. A full year's depreciation is charged in the year of acquisition of an asset but none in the year of disposal.

Plant & machinery 25% per annum reducing balance
Motor vehicles 25% per annum reducing balance

Other accounting policies
Stocks
Stocks and work in progress are valued consistently at the lower of cost (on a first in, first out basis) or net realisable value. Cost, where appropriate, includes a proportion of directly attributable overheads.

Debtors
Debtors are shown after providing for any amounts which in the opinion of the director may not be collected in full.

Deferred taxation
Deferred tax assets and liabilities have arisen from timing differences between the recognition of gains and losses in the financial statements and their recognition in a tax computation. Full provision is made for all liabilities, and provision is made for assets to the extent that they are considered more likely than not to be recoverable in the foreseeable future. Provision is made using tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based upon rates enacted at the balance sheet date.

Leasing
Leasing rentals payable on agreements which transfer substantially all the risk and rewards associated with ownership of the lessee ("finance leases") are capitalised within fixed assets, and the obligation to pay future rentals included in creditors as a liability. The interest charges implicit in such a lease are written off to the profit and loss account in proportion to the balance outstanding during the year.

All other leasing rentals ("operating leases") are written off to the profit and loss account over the life of the lease.

Going concern
The director is aware of the net liability position shown in these financial statements. This position is largely due to the loss of a major contract. The director is continuing to take steps to restructure the business to reduce its cost base, whilst developing new business to replace this. Obviously the company's ability to continue to trade is dependent on the success of these measures, just as all businesses depend on continuity of income. Any adjustments required to the carrying value of assets should the company not be a going concern have been made in these financial statements.