Freehold land & property comprises Investment Properties, being non-owner occupied buildings held to earn rentals and for capital appreciation.
All investment properties are carried at fair value. The fair value of the company's investment properties is determined annually at the reporting date by the directors. In determining the valuations, the directors refer to current market conditions and recent sales transactions of similar properties. In estimating the fair value of the properties, the highest and best use of the property is their current use. Changes in fair value are recognised in the income statement.
2024 fair value of investment property: £859,066 (2023: £399,808)
Investment property is derecognised when disposed of, or when no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property is recognised in profit or loss in the period in which the property is derecognised.
In accordance with FRS 102, depreciation is not provided for on Investment Properties. This is a departure from the Companies Act 2006 which requires all tangible assets to be depreciated. In the opinion of the directors, this departure is necessary for the financial statements to give a true and fair view and comply with applicable accounting standards which require Investment Properties to be included in the financial statements at fair value. The effect of depreciation is implicitly reflected in the valuation of investment properties, and the amount attributable to this factor cannot reasonably be separately identified or quantified by the valuers. Had the provisions of the Act been followed, assets would not have been affected but operating costs would have increased for this and earlier years and valuation movements would have correspondingly changed. There would be no impact on profit for the year.