The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its
financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a
legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash balances, are initially measured at transaction price including
transaction costs and are subsequently carried at amortised cost using the effective interest method. Financial assets
classified as receivable within one year are not amortised.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after
deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from connected parties are initially recognised at
transaction price and are subsequently carried at amortised cost, using the effective interest rate method. Financial
liabilities classified as payable within one year are not amortised.
Trade debtors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.