Additional Disclosures
Accounting Policies – Work in Progress
Work in progress is stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour and attributable overheads incurred in bringing the development to its current state. Borrowing costs directly attributable to development are capitalised once finance is drawn down. Costs are transferred to cost of sales on legal completion of the related properties.
Work in Progress
At the year end, the company’s work in progress comprised expenditure incurred on the development of two residential properties:
2024 (£) 2023 (£)
Opening balance 94,563 18,563
Costs capitalised during the year 2,245 76,000
Closing balance 96,808 94,563
Other Loans
At the year end, the company had an outstanding loan balance of £2,299 (2023: £25,387). The loan is [insert: unsecured/secured against property], repayable [insert: on demand / over x years], and carries interest of [x% / nil].
Going Concern
The company is in the development stage of two residential properties which will be sold on completion. The directors are confident that proceeds from the sale will be sufficient to meet the company’s obligations as they fall due. The directors continue to support the company financially as required.
Change in Presentation
In prior years, development costs were capitalised to work in progress with a corresponding adjustment posted to retained earnings. For the year ended 30 November 2024, the directors have revised the presentation so that costs are capitalised directly to work in progress with the corresponding credit to the relevant expense categories in the profit and loss account. This change has no impact on the company’s net assets or result for the year but provides a clearer presentation of work in progress and retained earnings. Comparative figures have not been restated as the impact is not material.