Abbreviated Company Accounts - ELECTRICAL SALES & DISTRIBUTION COMPANY LIMITED

1Accounting Policies

Basis of measurement and preparation of accounts
The financial statements have been prepared in accordance with United Kingdom generally accepted accounting practice, statute comprising the Companies Act 2006 and the Financial Reporting Standard for Smaller Entities (effective January 2015).

Turnover policy
Turnover is stated net of trade discounts, VAT and similar taxes and derives from the provision of goods falling within the company's ordinary activities.

Tangible assets depreciation policy
All tangible fixed assets are initially recorded at historic cost. Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost of valuation, less estimated residual value, of each asset systematically over its expected useful life, as follows:

Plant and machinery - 10% reducing balance
Fixtures, fittings & equipment - 15% reducing balance
Motor vehicles - 33.3% reducing balance

Intangible assets amortisation policy
Goodwill is the difference between the fair value of the consideration given on the acquisition of a business and the aggregate fair value of the separate net assets acquired. It is being amortised through the profit and loss account in equal instalments over its estimated economic life of 5 years on a straight-line basis. Goodwill is reviewed for impairment at the end of the first full financial year following acquisition and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.

Other accounting policies
Leasing
Rentals payable under operating leases are charged to the profit and loss on a straight line basis over the lease term.

Stock
Stocks are stated at the lower of cost and net realisable value. In the case of finished goods and work in progress, cost is defined as the aggregate cost of raw material, direct labour and the attributable proportion of direct production overheads based on a normal level of activity. Net realisable value is based on normal selling price, less further costs expected to be incurred to completion and disposal.