Abbreviated Company Accounts - AAG I.T. SERVICES LTD

1Accounting Policies

Basis of measurement and preparation of accounts
The financial statements are prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities (effective January 2015).

Although the company has made a loss in the period and has negative current liabilities at the year end, the company has prepared its accounts on a going concern basis. The company has received assurances from the directors and from a related company, AAG Systems Limited that they will continue to support the company to allow it to continue to trade for the foreseeable future. Following a review of the company's trading prospects and internal costs, the directors are confident of a return to profit in the foreseeable future.

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

Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Services includes the provision of support on annual contracts. Any element of sales income from this source which covers a period after the year end is included in deferred income.

Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

Computer equipment - 33.3% straight line
Fixtures, fittings and equipment - 20% straight line
Motor vehicles - 20% straight line

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

Rentals payable under operating leases are charged against income on a straight line basis over the lease term.

Deferred taxation
Deferred taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.

4Transactions with directors