Abbreviated Company Accounts - RARE FASHION LIMITED

1Accounting Policies

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

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 costs of fixed assets, less estimated residual value, over their expected useful lives on the following bases:

Fixtures & fittings - 33% straight line
Office equipment - 33% 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.

Foreign currencies

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the
transaction.
Exchange gains and losses are recognised in the Profit and loss account.

Going concern

The company depends on its funding facilities to meet its day to day working capital requirements.
Current forecasts indicate that the company expects to be able to operate within its facilities for the
foreseeable future. The directors believe it is appropriate to prepare the financial statements on the going concern basis.