Abbreviated Company Accounts - EXTRACT COFFEE ROASTERS LTD

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 represents the amount of goods sold and services provided during the year, net of Value Added Tax

Tangible assets depreciation policy
Depreciation is provided at rates calculated to write off the cost less residual value of each asset over its expected useful life, as follows:
Fixtures, fittings and equipment 25% reducing balance
Motor vehicles 25% reducing balance

Other accounting policies
Stock
Stock is valued at the lower of cost and net realisable value.

Hire purchase and finance lease 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.

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, with the following exceptions:


Provision is made for tax on gains arising from the revaluation (and similar fair value adjustments)
of fixed assets, and gains on disposal of fixed assets that have been rolled over into replacement
assets, only to the extent that, at the balance sheet date, there is a binding agreement to dispose
of the assets concerned. However, no provision is made where, on the basis of all available
evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into replacement assets and charged to tax only where the replacement assets are sold.

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 timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.