| Revaluation Reserves:
In accordance with FRS 102, the company has elected to measure certain assets at revalued amounts, reflecting their fair value at the date of revaluation. The revaluation of these assets is carried out periodically to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.
Brands Value Revaluation:
As part of the company’s strategic asset management, the brand value was revalued on 07/06/2024 (as per the letter received from the director). The valuation was conducted by the director and was based on an offer received from an independent company to acquire the Brands.
The carrying value of the brands at the previous reporting date was £0. Following the revaluation, the brand value is now recognised at £1,414,098.00 for Jatt Life and £157,122.00 for Rico 69. The revaluation surplus of £1,571,220.00 has been credited to the revaluation reserve within equity.
Key Assumptions and Estimates:
The valuation is based on the following key assumptions:
• Brand continues to increase in value
Impact on Financial Statements:
The movement in the revaluation reserve for the year is as follows:
Description Amount (£)
Revaluation surplus recognised 1,571,220.00
Any impairments recognised 0.00
Transfer to retained earnings 0.00
Closing balance of revaluation reserve 1,571,220.00
The revaluation reserve is not available for distribution to shareholders and is retained within equity until the asset is disposed of or becomes impaired.
Limitations:
The brand value is subject to ongoing review, and any subsequent decreases in value may require an impairment charge to be recognised in profit or loss. The directors remain vigilant in monitoring the market trends and performance indicators that may impact the brand’s valuation.
This disclosure is intended to provide users of the financial statements with relevant information on the company’s approach to the revaluation of brand value and the implications for financial reporting as per FRS 102 requirements. |