Debtors and Creditors
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price less any impairment. Any losses from impairment or amounts written off are recognised in the profit and loss account.
Cash at bank and in hand
Cash at bank and in hand is represented by cash in hand and deposits with financial institutions repayable without penalty within 24 hours. Cash equivalents are highly liquid investments that mature within three months from date of acquisition or deposit or notice of withdrawal and are readily convertible to known amounts of cash with insignificant risks of a change in value.
Provisions for liabilities
Provisions for liabilities are made where an event has taken place that gives the company a legal or constructive obligation to make a payment and a reliable estimate can be made of the amount payable, or that may become payable, taking into account relevant facts, risks, uncertainties and stages of negotiation of a settlement sum.
Provisions are charged as an expense to the Profit & Loss Account in the year that the Company becomes aware of the obligation,
When cash payments are made these are charged against the provision carried in the Balance sheet. Any difference between the payment and provision is then charged or credited to the Profit & Loss Account.