Abbreviated Company Accounts - DAVID ECCLES BUILDING CONTRACTORS LIMITED

1Accounting Policies

Basis of measurement and preparation of accounts
a) Basis of accounting
The financial statements are prepared on the historical cost basis of accounting and have been prepared in accordance with the Financial Reporting Standard for Smaller Entities (effective January 2015).
b) Turnover
Turnover represents the net invoiced sale of goods plus the value of work completed and not invoiced valued at estimated net realisable value, and excludes value added tax.

The value of work completed and not invoiced is included in debtors as amounts recoverable on contracts.
c) Depreciation of tangible fixed assets
Depreciation is provided on all tangible fixed assets at rates calculated to write off the full cost or valuation less estimated residual value of each asset over its estimated useful life. The principal rates in use are:
Motor vehicles 25% reducing balance basis
Plant and machinery 15% reducing balance basis
d) Stock
Stock is valued at the lower of cost and estimated net realisable value after making due allowance for obsolete or slow moving items. Cost includes any expenditure incurred in bringing the stock to its present location and condition.

Cost of raw materials is determined on the first in first out basis. Net realisable value is the price at which the stock can be released in the normal course of business, less further costs to completion of sale.
e) Deferred taxation
Deferred tax is provided in respect of the tax effect of all timing differences that have originated but not reversed at the balance sheet date.

A deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

Deferred tax is measured on a non discounted basis, at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
f) Operating leases
Rentals under operating leases are charged to the profit and loss account as they fall due.