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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Three Knights Limited is a private company limited by share capital, incorporated in England and Wales, registered number 01728083. The address of the registered office is 40 Queen Anne Street, London W1G 9EL.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention and in accordance with Section 1A Small Entities of Financial Reporting Standard 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' ('FRS 102') and the Companies Act 2006.
The following principal accounting policies have been applied:
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the turnover can be reliably measured. Turnover represents royalties and other income received and is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
Turnover from royalties is recognised on the accruals basis in accordance with the substance of the relevant agreement. In some cases, whether or not a royalty will be received is contingent on the occurrence of a future event. In such cases, turnover is recognised only when it is probable that the royalty will be received, which is normally when the event has occurred.
Short-term debtors are measured at the transaction price, less any impairment.
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Cash and cash equivalents
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Cash and cash equivalents are represented by cash in hand, deposits held with financial institutions, and other short-term highly liquid investments that mature in no more than three months from the date of acquisation and that are readily convertiable to known amounts of cash with insignificant risk of change in value.
The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found an impairment loss is recognised in the Profit and Loss Account.
Financial assets and liabilties are offset and the net amount reported in the Balance Sheet when there ia an enforeable right to set off the reconginsed amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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.
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