OCTOBER FILMS PRODUCTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Production tax credits are incentives provided to creative industries designed to promote culturally relevant productions in the UK, to incentivise investment into UK productions that would otherwise take place outside the UK, and to support the necessary critical mass of infrastructure and skills in the UK for both today and in the longer term.
Production tax credits are reported within other operating income and not taxation on the grounds that such tax credits are deemed to be working capital in nature for they arise, albeit not as a direct result, in the course of normal operational activities.
The comparatives of the financial statements were prepared for the period from 29 September 2022 to 31 December 2022, a period lesser than a year as this is the first reporting period for the company.
Subsequently, the current year results were prepared for the year ended 31 December 2023, and therefore the comparatives are not entirely comparable.
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Foreign currency translation
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Functional and presentation currency
Items included in the financial statements of the company are measured using the currency of the
primary economic environment in which the company operates (the "functional currency").
The functional currency of the company, and the currency in which the financial statements are
presented (the "presentational currency"), is 'Pounds Sterling' (£) rounded to the nearest single unit of
currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities; with said financial assets and liabilities classified in accordance with the substance of the underlying contractual obligations rather than its legal form.
Financial assets and liabilities are recognised in the company's balance sheet when the company becomes a party to the contractual provisions of the instrument.
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