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Gray Agency Limited
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Notes to the financial statements - continued
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for the year ended 31 December 2024
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2
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Accounting policies - continued
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Intangible assets
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Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured
at cost less any accumulated amortisation and any accumulated impairment losses.
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Amortisation is provided at the following annual rates in order to write off each asset over its estimated
useful life.
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Goodwill
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-
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Goodwill represents the excess of the cost of
acquisition of unincorporated businesses over the fair
value of net assets acquired. It is initially recognised as
an asset at cost and is subsequently measured at cost
less accumulated amortisation and accumulated
impairment losses. Goodwill is considered to have a
finite useful life and is amortised on a systematic basis
over its expected life, which is twenty years
For the purposes of impairment testing, goodwill is
allocated to the cash-generating units expected to
benefit from the acquisition. Cash-generating units to
which goodwill has been allocated are tested for
impairment at least annually, or more frequently when
there is an indication that the unit may be
impaired. If the recoverable amount of the cash-
generating unit is less than the carrying amount of the
unit, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the
unit and then to the other assets of the unit pro-rata on
the basis of the carrying amount of each asset in the
unit.
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Tangible fixed assets
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Depreciation is provided at the following annual rates in order to write off each asset over its estimated
useful life or, if held under a finance lease, over the lease term, whichever is the shorter.
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Plant and machinery etc.:
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Plant and machinery
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15% reducing balance
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Fixtures & fittings
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15% reducing balance
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Computer equipment
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25% reducing balance
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Taxation
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Taxation for the year comprises current taxation. Tax is recognised in the Profit and loss account,
except to the extent that it relates to items recognised in other comprehensive income or directly in
equity.
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Current taxation assets and liabilities are not discounted.
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Current tax is recognised at the amount of tax payable using the tax rates and laws that have been
enacted or substantively enacted by the balance sheet date.
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4
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