Accounting policies
Significant accounting policies
Statement of compliance
These financial statements have been prepared in compliance with FRS 105 – The Financial Reporting Standard applicable in the UK and Republic of Ireland and the Companies Act 2006.
Basis of preparation
The financial statements have been prepared under the historical cost convention as modified by the revaluation of land and buildings and certain financial instruments measured at fair value in accordance with the accounting policies.
The financial statements are prepared in sterling which is the functional currency of the company.
Turnover
Turnover comprises the invoiced value of goods and services supplied by the company, net of Value Added Tax and trade discounts.
Government grants
Government grants received are credited to deferred income. Grants towards capital expenditure are released to the income statement over the expected useful life of the assets. Grants received towards revenue expenditure are released to the income statement as the related expenditure is incurred.
Deferred taxation
Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.
Dividends
Proposed dividends are only included as liabilities in the statement of financial position when their payment has been approved by the shareholders prior to the statement of financial position date.
Preference dividends
Where preference shares are classed as liabilities rather than equity any preference dividends paid are included in interest payable and similar charges within the income statement.
Goodwill
Acquired goodwill is stated at cost less amortisation. Amortisation is calculated on a straight line basis over the estimated expected useful economic life of the goodwill of years.
Licences and patents
Licences and patents are stated at cost less amortisation. Amortisation of licences is calculated on a straight line basis over the life of the licence. Amortisation of patents is calculated on a straight line basis over the estimated expected useful economic life of the patents of years.
Development expenditures
Research and development expenditure is charged to the income statement in the period in which it is incurred. However, where the directors are satisfied as to the technical, commercial and financial viability of individual projects, development expenditure is deferred and amortised over years during which the company is expected to benefit.
Computer software development costs
Development costs of computer software are capitalised once a detailed program design has been established and are amortised on a straight line basis over years.
Franchise Fees
Franchise Fees is stated at cost less amortization. Amortization is calculated on a straight line basis over the estimated expected useful economic life of the Franchise Fees of years.
Trade Mark
Trade Mark is stated at cost less amortization. Amortization is calculated on a straight line basis over the estimated expected useful economic life of the Trade Mark of years.
Copy Rights
Copy Rights is stated at cost less amortisation. Amortisation is calculated on a straight line basis over the estimated expected useful economic life of the Copy rights of years.
Software License
Software License is stated at cost less amortisation. Amortisation is calculated on a straight line basis over the estimated expected useful economic life of the Software License of years.
Tangible fixed assets
Tangible fixed assets, other than freehold land, are stated at cost or valuation less depreciation and any provision for impairment. Depreciation is provided at rates calculated to write off the cost or valuation of fixed assets, less their estimated residual value, over their expected useful lives on the following basis:
Fixtures and Fittings |
25% Reducing Balance
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Computer Equipment |
25% Reducing Balance
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Investment properties
Investment properties are properties held to earn rentals and/or for capital appreciation.
Investment properties should be recognised initially at cost and subsequently investment properties are measured at fair value. Gains and losses arising from changes in the fair value of investment properties are included in profit or loss in the period in which they arise.
Stocks
Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow moving items. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.
Current asset investments
Current asset investments are stated at the lower of cost and net realisable value.
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