Abbreviated Company Accounts - HOLLS 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
The turnover shown in the profit and loss account represents the value of all goods sold during
the period, less returns received, at selling price exclusive of Value Added Tax. Sales are
recognised at the point at which the company has fulfilled its contractual obligations and the
risks and rewards attaching to the product, such as obsolescence, have been transferred to the
customer.

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:

Leasehold Property - 10% straight line
Plant & Machinery - 25% reducing balance
Motor Vehicles - 25% reducing balance

Valuation information and policy
Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for
obsolete and slow moving items.

Other accounting policies
Pension costs

The company operates a defined contribution pension scheme for employees. The assets of the
scheme are held separately from those of the company. The annual contributions payable are
charged to the profit and loss account.

Deferred taxation

Deferred tax is recognised in respect of all material timing differences that have originated but
not 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 to receive more tax.

The only exception is that deferred tax assets are recognised only to the extent that the directors
consider that it is more likely than not that there will be suitable taxable profits from which the
future reversal of the underlying timing differences can be deducted.

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