Abbreviated Company Accounts - GRANDPA'S BREADS LIMITED

1Accounting Policies

Basis of measurement and preparation of accounts
The financial statements are prepared on the historical cost basis of accounting and have been
prepared in accordance with applicable accounting standards.
The company has taken advantage of the exemption, conferred by Financial Reporting Standard 1,from presenting a cash flow statement as it qualifies as a small company.

Turnover policy
Turnover represents net invoiced sales of goods and services, excluding value added tax.

Tangible assets depreciation policy
Depreciation is provided on all tangible fixed assets at rates calculated to write off the full cost or
valuation less estimated residual value of each asset over its estimated useful life. The principal
rates in use are:
Equipment, fixtures and fittings 25% reducing balance

Other accounting policies
Stocks
Stock and work in progress is valued at the lower of cost and estimated net realisable value.
Cost of raw materials is determined on the first in first out basis. In the case of work in progress and
finished goods, cost includes all direct expenditure and production overheads based on the normal
level of activity. Net realisable value is the price at which the stock can be released in the normal
course of business, less further costs to completion of sale.

Hire purchase and lease transactions
Assets acquired under hire purchase agreements and finance leases are capitalised in the balance
sheet and are depreciated in accordance with the company's normal policy. The outstanding
liabilities under such agreements less interest not yet due are included in creditors. Interest on such
agreements is charged to the profit and loss account over the term of each agreement and
represents a constant proportion of the balance of capital repayments outstanding.