Abbreviated Company Accounts - NIRVANA AUDIO VISUAL LTD

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 is recognised consistently with the right to receive consideration in exchange for the performance of supplying services and goods.

Tangible assets depreciation policy
Fixed Assets
All fixed assets are originally recorded at cost.
Depreciation
Depreciation is calculated so as to write of the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:
Fixtures & Fittings - 20% reducing balance
Motor Vehicles - 20% reducing balance
Equipment - 5 years straight line

Other accounting policies
Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.
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 receive more tax.
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.
Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classified as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.
Going concern
At the year end the company's liabilities exceeded its assets and the company is reliant on the support of the directors to be able to continue to trade. The directors do not intend to seek repayment of the loan due to them until the company is solvent and they believe the going concern basis is appropriate.