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2. |
Summary of Significant Accounting Policies |
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The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company's financial statements. |
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Statement of compliance |
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The financial statements of the company for the year ended 30 June 2023 have been prepared in accordance with the provisions of FRS 102 Section 1A (Small Entities) and the Companies Act 2006. |
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Basis of preparation |
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The financial statements have been prepared on the going concern basis and in accordance with 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. |
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Turnover |
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Turnover comprises the invoice value of services supplied by the company, exclusive of value added tax. The company recognises turnover when the amount of revenue, costs and stage of completion can be measured reliably and the customer or the customers representatives approves the extent of works completed. |
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Construction Contracts |
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Results on long term contracts are recognised in accordance with section 23, revenue of FRS 102.
When the outcome of a construction contract can be estimated reliably, the company recognises contract revenue and contract costs as revenue and expenses respectively by reference to the stage of completion of the contract activity at the end of the reporting period; this is generally estimated in the form of architects or quantity surveyors agreed valuation certificates and includes a profit element.
The profit or losses on contracts are calculated by applying percentage completion method. The completion percentage is based on comparing the costs incurred with the value of work executed. Such value includes estimates of uncertified amount and claims.
The company will review and when necessary revise the estimates of revenue and costs as the construction contract progresses.
When it is probable that total contract costs will exceed total contract revenue on a construction contract, the expected loss shall be recognised as an expense immediately with a corresponding provision for an onerous contract. |
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Intangible assets |
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Goodwill |
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Purchased goodwill arising on the acquisition of a business represents the excess of the acquisition cost over the fair value of the identifiable net assets including other intangible fixed assets when they were acquired. Purchased goodwill is capitalised in the Balance Sheet and amortised on a straight line basis over its economic useful life of 10 years, which is estimated to be the period during which benefits are expected to arise. On disposal of a business any goodwill not yet amortised is included in determining the profit or loss on sale of the business. |
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Tangible assets and depreciation |
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Tangible assets 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 tangible assets, less their estimated residual value, over their expected useful lives as follows: |
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Land and buildings freehold |
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2% Straight line |
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Plant and machinery |
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15 % Reducing Balance |
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Fixtures, fittings and equipment |
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25% Reducing Balance |
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Motor vehicles |
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25% straight line |
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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. |
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Stocks |
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Work in progress includes cost of materials and labour and is valued at the lower of cost and net realisable value. |
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Trade and other debtors |
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Trade and other debtors 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. |
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Trade and other creditors |
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Trade and other creditors 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. |
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Taxation |
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Current tax represents the amount expected to be paid or recovered in respect of taxable profits for the financial year and is calculated using the tax rates and laws that have been enacted or substantially enacted at the Balance Sheet date. |
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Ordinary share capital |
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The ordinary share capital of the company is presented as equity. |