| |
|
|
|
|
| 2. |
ACCOUNTING POLICIES |
|
|
|
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company’s financial statements. |
|
|
|
Statement of compliance |
|
The financial statements of the company for the year ended 31 January 2017 have been prepared in accordance with the provisions of FRS 102 Section 1A (Small Entities) and the Companies Act 2006. These are the company's first set of financial statements prepared in accordance with FRS 102. |
|
|
|
Basis of preparation |
|
The financial statements have been prepared under the historical cost convention except for certain properties and financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company's financial statements. |
|
|
|
Cash flow statement |
|
The company has availed of the exemption in FRS 102 Section 1A from the requirement to prepare a Statement of Cash Flows because it is classified as a small company. |
|
|
|
Revenue |
|
Turnover is recognised upon delivery of goods to the customer. |
|
|
| |
|
|
|
|
|
Property, plant and equipment and depreciation |
|
Property, plant and equipment are stated at cost or at valuation, less accumulated depreciation. The charge to depreciation is calculated to write off the original cost or valuation of property, plant and equipment, less their estimated residual value, over their expected useful lives as follows: |
|
|
| |
|
Fixtures, fittings and equipment |
- |
20% reducing balance |
| |
|
Motor vehicles |
- |
25% reducing balance |
|
|
|
The carrying values of tangible fixed assets are reviewed annually for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable. |
|
|
| |
|
|
|
|
|
Inventories |
|
Stocks are valued at the lower of cost and net realisable value. Cost comprises expenditure incurred in the normal course of business in bringing stocks to their present location and condition. Full provision is made for obsolete and slow moving items. Net realisable value comprises actual or estimated selling price (net of trade discounts) less all further costs to completion or to be incurred in marketing and selling. |
|
|
| |
|
|
|
|
|
Trade and other receivables |
|
Trade and other receivables are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases the receivables are stated at cost less impairment losses for bad and doubtful debts. |
|
|
| |
|
|
|
|
|
Borrowing costs |
|
Borrowing costs relating to the acquisition of assets are capitalised at the appropriate rate by adding them to the cost of assets being acquired. Investment income earned on the temporary investment of specific borrowings pending their expenditure on the assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. |
|
|
| |
|
|
|
|
|
Trade and other payables |
|
Trade and other payables are initially recognised at fair value and thereafter stated at amortised cost using the effective interest rate method, unless the effect of discounting would be immaterial, in which case they are stated at cost. |
|
|
| |
|
|
|
|
|
Employee benefits |
|
The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. |
|
|
| |
|
|
|
|
|
Taxation |
|
Current tax represents the amount expected to be paid or recovered in respect of taxable profits for the year and is calculated using the tax rates and laws that have been enacted or substantially enacted at the Statement of Financial Position date. |
|
|
| |
|
|
|
|
|
Foreign currencies |
|
Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the Statement of Financial Position date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated at the rates of exchange ruling at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. The resulting exchange differences are dealt with in the Income Statement. |
|
|
