Debtors and Creditors
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses from impairment or amounts written off are recognised in the profit and loss account.
Loans and borrowings
Loans and borrowings are initially recognised at the transaction price including related costs. Subsequently they are measured at amortised cost using the effective interest rate method, less impairment if applicable. Impairment is computed as the difference between the carrying value of an asset and best estimate of the recoverable amount if sold in the open market at balance sheet date. If an arrangement constitutes a finance transaction it is measured at present value.
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 3 months. 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 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.