The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.
Financial assets
Basic financial assets, including trade, intercompany debtors, other debtors and cash and bank balances, are
initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the
transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Such assets are subsequently carried at amortised cost using the effective interest method.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective
evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying
amount and the present value of the estimated cash flows discounted at the asset's original effective interest
rate. The impairment loss is recognised in the profit or loss.
There are no assets which are initially measured at fair value.
Financial liabilities
Basic financial liabilities, including trade and other creditors and intercompany creditors, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.