Abbreviated Company Accounts - JOHN ANDREWS & CO. LIMITED

1Accounting Policies

Basis of measurement and preparation of accounts
The accounts have been prepared in accordance with the Financial Reporting Standard for Smaller Entities (effective January 2015) and under the historical cost convention modified to include the revaluation of freehold land and buildings.

Under FRS 1 the company is exempt from the requirement to prepare a cashflow statement on the grounds that it qualifies as a small company.

Compliance with accounting standards

The financial statements are prepared in accordance with applicable United Kingdom Accounting Practice), which have been applied consistently (except as otherwise stated).

Turnover policy
Turnover represents the value, net of value added tax and discounts, of goods provided to customers and work carried out in respect of services provided to customers. Turnover is recognised when a right to consideration is obtained from performance of contractual obligations.

Milk Quota
Milk quota was previously capitalised and is now fully amortised.

Tangible assets depreciation policy
Tangible fixed assets other than freehold land are stated at cost or valuation less depreciation. Depreciation is provided at rates calculated to write off the cost or valuyation less estimated residual value of each asset over its expected useful life, as follows:

Land and buildings Freehold 2%/2.5%/5% straight line.
Plant and machinery 20% reducing balance/12.5% straight line.

Land and buildings include properties that are subject to protected tenancies, controlled rent or vacant and unrenovated.

Other accounting policies
Investments
Current asset investments are stated at cost less provision for permanent diminution in value.

Stock
Stock is valued at the lower of cost and net realisable value. Crop stock is stated at directors' valuation.

Pensions
The pension costs charged in the financial statements represent the contributions payable by the company during the year in accordance with FRS 17.

Deferred taxation
Full provision for deferred tax liabilities is provided at current tax rates on differences that arise between the recognition of gains and losses in the financial statements and their recognition in the tax computation, except for differences arising on the revaluation of fixed assets (if no commitment to sell), or gains on any asset sold that will benefit from rollover relief. No provision is made for any deferred tax assets.

Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.

Grants
Grants are credited to deferred revenue. Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets. Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred.

Where a grant is received in respect of an investment property a problem arises under SSAP 4 in that there is no clear mechanism for recognising the grant. The standard accounting practice for grants is to match the receipt with the related expenditure towards which they contribute - for fixed assets this is taken as the expected useful economic life. Where the grant is in respect of an investment property and no depreciation is charged, there would be no recognition of the grant in the Profit and Loss Account. The result of this, however, would be to have a grant included on the balance sheet which comprises neither a liability nor deferred income. As a consequence, the company has applied the "true and fair override" and deducted the grant from the value of the investment properties.

Investment Properties
Investment properties are valued by the directors on the basis of discounted rateable value which is their estimate of open market value given restrictions on marketability. These properties have been renovated and are subject to rents on an open market basis.

No depreciation is provided in respect of investment properties; this constitutes a departure from the statutory rules requiring fixed assets to be depreciated over their economic lives. The directors consider, as these properties are held for their investment potential, to depreciate them would not give a true and fair view and therefore it is necessary to adopt SSAP 19 in order to give a true and fair view.

If this departure from the Act had not been made the profit for the financial year would have been decreased by depreciation. However, the amount of depreciation cannot be quantified because depreciation is only one of many factors reflected in the annual valuation and the amount which might have been shown cannot be separately identified or quantified.