Abbreviated Company Accounts - REEL IT WINDING MACHINES 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 the value of sales (excluding VAT and similar taxes and trade discounts) of goods and services in the normal course of business.

Tangible assets depreciation policy
Motor vehicles - 25% reducing balance
Equipment - 20% straight line

Intangible assets amortisation policy
Acquired goodwill is written off in equal annual instalments over its useful economic life of 10 years.

Other accounting policies
1. Stocks
Stock is stated at the lower of cost and net realisable value.

2. Leasing and hire purchase contracts
Assets obtained under finance leases and hire purchase contracts are capitalised as tangible fixed assets. Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives. Assets acquired under hire purchase contracts 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. 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.