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| 2. |
Summary of Significant Accounting Policies |
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The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company's financial statements. |
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Statement of compliance |
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The financial statements of the company for the financial year ended 31 August 2024 have been prepared in accordance with the provisions of FRS 102 Section 1A (Small Entities) and the Companies Act 2006. |
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Basis of preparation |
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland and the Companies Act 2014.
The following accounting policies have been applied.
Going Concern
The Director of Aerospace Metal Finishers Limited has reviewed the appropriateness of the going concern assumption and consider that the company has sufficient resources available to enable it to continue to meet its ongoing obligations for at least a period of 12 months from the date of approval of the financial statements. The companys current financial performance and forecasts to 31 August 2026, after taking into account changes in trading performance, show that the company continues to be cash generative. Accordingly, the Director believes that it is appropriate to continue to adopt the going concern basis in preparing the financial statements. |
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Turnover |
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Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and revenue can be measured reliably. Turnover from a contract is measured as the fair value of any consideration received or receivable, excluding discounts, value added taxes and other sales taxes.
Rendering of services Turnover from a contract to provide metal finishing services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied - The amount of revenue can be measured reliably; - It is probable the Company will receive the consideration due under the contract; - The stage of completion of the contract at the end of the reporting period can be measured reliably; and - The costs incurred and the costs to complete the contract can be measured reliably |
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Research and development |
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Research expenditure is written off to the Profit and Loss Account in the year in which it is incurred. Development expenditure is written off in the same way unless directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.
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Tangible assets and depreciation |
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Tangible assets are stated at cost or at valuation, less accumulated depreciation. The charge to depreciation is calculated to write off the original cost or valuation of tangible assets, less their estimated residual value, over their expected useful lives as follows: |
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Long-term leasehold property |
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10% on reducing balance basis |
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Plant and machinery |
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20% on reducing balance basis |
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Fixtures, fittings and equipment |
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20% on straight line basis |
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Motor vehicles |
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25% on reducing balance basis |
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The carrying values of tangible fixed assets are reviewed annually for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable. |
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Leasing and hire purchases |
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Tangible assets held under leasing and Hire Purchases arrangements which transfer substantially all the risks and rewards of ownership to the company are capitalised and included in the Balance Sheet at their cost or valuation, less depreciation. The corresponding commitments are recorded as liabilities. Payments in respect of these obligations are treated as consisting of capital and interest elements, with interest charged to the Profit and Loss Account. |
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Stocks |
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Stocks are valued at the lower of cost and net realisable value. Cost comprises expenditure incurred in the normal course of business in bringing stocks to their present location and condition. Full provision is made for obsolete and slow moving items. Net realisable value comprises actual or estimated selling price (net of trade discounts) less all further costs to completion or to be incurred in marketing and selling. |
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Trade and other debtors |
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Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases the receivables are stated at cost less impairment losses for bad and doubtful debts. |
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Provisions |
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Provisions are recognised when the company has a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the same value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense. |
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Trade and other creditors |
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Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest rate method, unless the effect of discounting would be immaterial, in which case they are stated at cost. |
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Employee benefits |
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The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. |
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Taxation and deferred taxation |
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Current tax represents the amount expected to be paid or recovered in respect of taxable profits for the financial year and is calculated using the tax rates and laws that have been enacted or substantially enacted at the Balance Sheet date. |
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Foreign currencies |
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Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the Balance Sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated at the rates of exchange ruling at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. The resulting exchange differences are dealt with in the Profit and Loss Account. |
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Ordinary share capital |
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The ordinary share capital of the company is presented as equity.
The preference shares of the company are presented as debt. |