Abbreviated Company Accounts - J & M (GUEST HOUSE) LIMITED

1Accounting Policies

Turnover policy
The turnover shown in the profit and loss account represents the value of all goods sold
during the period, less returns received, at selling price exclusive of Value Added Tax.
Sales are recognised at the point at which the company has fulfilled its contractual
obligations and the risks and rewards attaching to the product, such as obsolescence, have
been transferred to the customer.

Tangible assets depreciation policy
Depreciation is calculated so as to write off the cost of an asset, less its estimated residual
value, over the useful economic life of that asset as follows:
Plant & Machinery - 20% Straight line
Fixtures & Fittings - 10% Straight line
Motor Vehicles - 25% Reducing balance
Equipment - 20% Straight line

Intangible assets amortisation policy
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual
value, over the useful economic life of that asset as follows:
Goodwill - 20 years straight line

Other accounting policies
Basis of accounting
The financial statements have been prepared under the historical cost convention, and in
accordance with the Financial Reporting Standard for Smaller Entities (effective January
2015).

Going concern
The company has reported a loss for the current financial year. Despite this, the company
has been able to continue to trade and meets its liabilities as they fall due and the director
expects the company to return to profit in the future. The director therefore considers that
the use of the going concern basis remains appropriate in the preparation of these
accounts.

Fixed assets
All fixed assets are initially recorded at cost.

Stocks
Stocks are valued at the lower of cost and net realisable value, on a first-in-first-out basis,
after making due allowance for obsolete and slow moving items. Cost is based on
purchase price.

Hire purchase agreements
Assets held under hire purchase agreements are capitalised and disclosed under tangible
fixed assets at their fair value. The capital element of the future payments is treated as a
liability and the interest is charged to the profit and loss account on a straight line basis.

Deferred taxation
Deferred tax is recognised in respect of all material timing differences that have originated
but not reversed at the balance sheet date where transactions or events have occurred at
that date that will result in an obligation to pay more, or a right to pay less or to receive
more tax.
The only exception is that deferred tax assets are recognised only to the extent that the
directors consider that it is 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 an undiscounted basis at the tax rates that are expected to
apply in the periods in which timing differences reverse, based on tax rates and laws
enacted or substantively enacted at the balance sheet date.

Financial instruments
Financial liabilities and equity instruments are classified according to the substance of the
contractual arrangements entered into. An equity instrument is any contract that evidences
a residual interest in the assets of the entity after deducting all of its financial liabilities.