Abbreviated Company Accounts - GARMONY LIMITED

1Accounting Policies

Basis of measurement and preparation of accounts
Accounts are prepared under the historical cost convention except for the revaluation of the
investment property. The accounts have also been prepared in accordance with the Financial
Reporting Standard for Small Entities (effective January 2015).

Turnover policy
Turnover represents the value of work carried out in respect of contracting activities during the
year, including amounts invoiced after the balance sheet date in respect of work completed
during the year. Turnover excludes value added tax.

Tangible assets depreciation policy
Tangible fixed assets and depreciation

Tangible fixed assets are stated at cost. Depreciation is charged so as to write off the full
cost over their expected useful lives. The rates used are :

Furniture and equipment Owned assets - 20% reducing balance

Tangible fixed assets - investment property

In accordance with the Financial Reporting Standard for Smaller Entities (effective January
2015), no depreciation has been provided in respect of the long leasehold property held as an
investment. This is a departure from the requirements of the Companies Act 2006 which
requires all properties to be depreciated. Such properties are held for investment and not for
consumption and the director considers that to depreciate them would not give a true and fair
view. Depreciation is only one of the many elements reflected in the annual valuation of
properties and accordingly the amount of depreciation which would otherwise have been
charged cannot be separately identified or quantified. The director considers that this policy
results in the accounts giving a true and fair view.

Other accounting policies
Profit recognition on contracts / long term contracts

Profit on contracting activities is taken as work progresses. Unless a more conservative
approach is necessary, the percentage margin on each individual contract is the lower of
the margin earned to date and that forecast at completion taking account of agreed
claims. Full provision is made for all known or expected losses at completion immediately
such losses are forecast on each contract.

Claims are included in the valuation of contracts and credited to the profit and loss account
only when entitlement has been established.

Work in progress on small projects incomplete at balance sheet date is stated at the lower
of cost plus attributable overheads and net realisable value.


Taxation and deferred taxation

The charge or credit for taxation is based on the results for the period as adjusted for
disallowable items. Tax deferred or accelerated is accounted for on all material timing
differences.

Operating lease commitments

Rentals relating to operating leases are charged to profit and loss account over the period
of the lease.