Abbreviated Company Accounts - JONATHAN WOOD LIMITED

1Accounting Policies

Basis of measurement and preparation of accounts
The accounts have been prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities effective April 2008.

Turnover policy
Turnover represents amounts chargeable, net of value added tax, in respect of the sale of goods and services
to customers.

Tangible assets depreciation policy
Depreciation
Depreciation is provided on tangible fixed assets so as to write off the cost or valuation, less any estimated
residual value, over their expected useful economic life as follows:
Asset class Depreciation method and rate
Leasehold improvements 10% straight line
Plant and machinery 15% reducing balance
Motor vehicles 25% reducing balance
Office equipment 33% straight line

Intangible assets amortisation policy
Goodwill
Positive goodwill is capitalised, classified as an asset on the balance sheet and amortised on a straight line
basis over its useful economic life. It is reviewed for impairment at the end of the first full financial year following
the acquisition and in other periods if events or changes in circumstances indicate that the carrying value may
not be recoverable.
Amortisation
Amortisation is provided on intangible fixed assets so as to write off the cost, less any estimated residual value,
over their expected useful economic life as follows:
Asset class Amortisation method and rate
Goodwill 5% straight line

Other accounting policies
Stock
Stock is valued at the lower of cost and net realisable value, after due regard for obsolete and slow moving
stocks. Net realisable value is based on selling price less anticipated costs to completion and selling costs.
Deferred tax
Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of
certain items for taxation and accounting purposes, which have arisen but not reversed by the balance sheet
date, except as required by the FRSSE.
Deferred tax is measured at the rates that are expected to apply in the periods when the timing differences are
expected to reverse, based on the tax rates and law enacted at the balance sheet date.
Hire purchase and leasing
Rentals payable under operating leases are charged in the profit and loss account on a straight line basis over
the lease term.
Assets held under finance leases, which are leases where substantially all the risks and rewards of ownership of
the asset have passed to the company, are capitalised in the balance sheet as tangible fixed assets and are
depreciated over the shorter of the lease term and their useful lives. The capital elements of future obligations
under the leases are included as liabilities in the balance sheet. The interest element of the rental obligation is
charged to the profit and loss account over the period of the lease and represents a constant proportion of the
balance of capital repayments outstanding. Assets held under hire purchase agreements are capitalised as
tangible fixed assets and are depreciated over the shorter of the lease term and their useful lives. The capital
element of future finance payments is included within creditors. Finance charges are allocated to accounting
periods over the length of the contract and represent a constant proportion of the balance of capital repayments
outstanding.
Financial instruments
Financial instruments are classified and accounted for, according to the substance of the contractual
arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract
that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares
are issued, any component that creates a financial liability of the company is presented as a liability in the
balance sheet. The corresponding dividends relating to the liability component are charged as interest expense
in the profit and loss account.