Abbreviated Company Accounts - SEATON BEACH CAFE LTD

1Accounting Policies

Basis of measurement and preparation of accounts
The financial statements have been prepared under the historical cost convention, and in
accordance with the Financial Reporting Standard for Smaller Entities (effective January
2015).

The going concern basis of accounting is considered appropriate by the director because
there are no current material inconsistencies related to events or conditions that cast
significant doubt on the ability of the company to continue as a going concern.

However, following the devastating flood of 2014, only limited insurance cover has been
able to be secured and should this rare event reoccur it could jeopardise the business'
ability to act as a going concern.

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
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 - fully amortised
Equipment - 20% reducing balance basis
Motor Vehicles - 25% reducing balance basis
Office Equipment - 25% reducing balance basis

Intangible assets amortisation policy
Goodwill
The remaining useful economic life of goodwill has been aligned with the term of the
leasehold property.

Amortisation
Amortisation 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:
Goodwill - 11.11% straight line basis

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.

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

Other accounting policies
Deferred taxation
Deferred tax is recognised in respect of all 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.

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 terms of share capital do not have any terms meeting the definition
of a financial liability then this is classed as an equity instrument. Dividends and
distributions relating to equity instruments are debited direct to equity.

All fixed assets are initially recorded at cost.