|
THE COMMUNICATION PRACTICE LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2025
2.ACCOUNTING POLICIES (CONTINUED)
|
|
|
DIVISION AND DISTRIBUTION OF PROFITS
|
A division of profits is the mechanism by which the profits of an LLP become a debt due to members. A division may be automatic or discretionary, may relate to some or all of the profits for a financial period and may take place during or after the end of a financial period.
An automatic division of profits is one where the LLP does not have an unconditional right to avoid making a division of an amount of profits based on the members' agreement in force at the time, whereas a discretionary division of profits requires a decision to be made by the LLP, which it has the unconditional right to avoid making.
The designated members of the LLP can decide how much profit, if any, is retained for working capital before distribution to the members. After drawings are accounted for, each member receives the balance of their actual profit share in their current account.
All losses and liabilities of an income nature of the LLP shall, unless otherwise agreed by all members, be borne by the members in the same proportions as those in which they would be entitled to share in the profits for the financial year during which such losses or liabilities are incurred.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
|
|
|
CASH AND CASH EQUIVALENTS
|
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
|
|
The entity has no employees.
|
|
|
|
|
|
|
Prepayments and accrued income
|
|
|
|
|
|
|