Abbreviated Company Accounts - CHILDS W 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 amounts invoiced during the year,
exclusive of Value Added Tax.

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:
Motor Vehicles - 25% reducing balance
Equipment - 1/3 straight line

Other accounting policies
Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for
obsolete and slow moving items.
Hire purchase agreements
Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed
assets at their fair value. The capital element of the future payments is treated as a liability and
the interest is charged to the profit and loss account on a straight line basis.
Finance lease agreements
Where the company enters into a lease which entails taking substantially all the risks and
rewards of ownership of an asset, the lease is treated as a finance lease. The asset is recorded
in the balance sheet as a tangible fixed asset and is depreciated in accordance with the above
depreciation policies. Future instalments under such leases, net of finance charges, are included
within creditors. Rentals payable are apportioned between the finance element, which is charged
to the profit and loss account on a straight line basis, and the capital element which reduces the
outstanding obligation for future instalments.
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.
Deferred taxation
Deferred taxation is provided on the liability method to take account of timing differences
between the treatment of certain items for accounts purposes and their treatment for tax
purposes. Tax deferred or accelerated is accounted for in respect of all material timing
differences.

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.