Basic financial liabilities, including trade and other creditors, loans from third parties and loans from related parties, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Such instruments are subsequently carried at amortised cost using the effective interest method, less any impairment.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the Company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
2.9. Share Capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
2.10. Reclassification of Comparative Amounts
In the prior year, the loan owing to the company’s immediate parent undertaking (2023: £119,565) was reported within creditors: amounts falling due after more than one year. It has been determined that the loan is in fact repayable on demand and therefore should be presented within creditors: amounts falling due within one year.
The comparative figures have been restated accordingly. The reclassification has no impact on the company’s net assets, results for the year, or cash flows.