During the current financial year, the company has reviewed its accounting policies in accordance with Financial Reporting Standard 102 (FRS 102) Section 1A, with a view to ensuring that its financial statements provide a true and fair value of its financial position and performance.
As a result of this review, the company has amended its depreciation policy for plant & machinery. Previously, plant & machinery was depreciated on a straight line basis. However, following a reassessment of the economic use of these assets and their residual values, the company has revised the depreciation rates and now adopts a reducing balance method.
The change has been made to ensure the carrying amounts of fixed assets more accurately reflect their fair value and remaining economic life. This is considered to result in a more reliable and relevant presentation of the company's financial position and performance.