Abbreviated Company Accounts - COCKWELLS MODERN AND CLASSIC BOAT BUILDING 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 comprises revenue recognised by the company in respect of goods and services supplied
during the year, exclusive of Value Added Tax and trade discounts.

Tangible assets depreciation policy
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates
calculated to write off the cost of fixed assets, less their estimated residual value, over their
expected useful lives on the following bases:
Plant and machinery - 10% straight line
Motor vehicles - 25% straight line
Fixtures and fittings - 20% straight line

Intangible assets amortisation policy
Goodwill is the difference between amounts paid on the acquisition of a business and the fair value
of the identifiable assets and liabilities. It is amortised to the Profit and loss account over its
estimated economic life.
Amortisation is provided at the following rates:
Goodwill - 5% straight line

Other accounting policies
LEASING AND HIRE PURCHASE
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed
assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their
useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases
are those where substantially all of the benefits and risks of ownership are assumed by the
company. Obligations under such agreements are included in creditors net of the finance charge
allocated to future periods. The finance element of the rental payment is charged to the Profit and
loss account so as to produce a constant periodic rate of charge on the net obligation outstanding in
each period.

STOCKS
Stocks are valued at the lower of cost and net realisable value after making due allowance for
obsolete and slow-moving stocks. Cost includes all direct costs and an appropriate proportion of
fixed and variable overheads.

DEFERRED TAXATION
Full provision is made for deferred tax assets and liabilities arising from all timing differences
between the recognition of gains and losses in the financial statements and recognition in the tax
computation.
A net deferred tax asset is recognised only if it can be regarded as 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 assets and liabilities are calculated at the tax rates expected to be effective at the time
the timing differences are expected to reverse.
Deferred tax assets and liabilities are not discounted.

GOVERNMENT GRANTS
Government grants relating to tangible fixed assets are treated as deferred income and released to
the Profit and loss account over the expected useful lives of the assets concerned. Other grants are
credited to the Profit and loss account as the related expenditure is incurred.

LONG-TERM CONTRACTS
Profit on long-term contracts is taken as the work is carried out if the final outcome can be assessed
with reasonable certainty. The profit included is calculated on a prudent basis to reflect the
proportion of the work carried out at the year end, by recording turnover and related costs as
contract activity progresses. Turnover is calculated as that proportion of total contract value which
costs incurred to date bear to total expected costs for that contract. Revenues derived from
variations on contracts are recognised only when they have been accepted by the customer. Full
provision is made for losses on all contracts in the year in which they are first foreseen.