Investment property is property held to earn rental income, for capital appreciation, or for both, but not for sale in the ordinary course of business.

Investment property is initially measured at cost, which includes the purchase price and any directly attributable expenditure incurred in acquiring the property.

Subsequent to initial recognition, investment property is measured at fair value at each reporting date. Fair value is determined by the directors using an open market value basis in accordance with FRS 102. In determining fair value, the directors have regard to market evidence of transaction prices for similar properties, rental yields, and prevailing market conditions.

The directors periodically obtain independent valuations prepared by suitably qualified RICS valuers in accordance with the RICS Valuation ? Global Standards (“Red Book”). Between formal external valuations, the directors assess fair value at each reporting date by reference to the most recent independent valuation, adjusted where appropriate to reflect observable changes in market conditions and property-specific factors. Where the directors consider that there has been a material change in value, an updated independent Red Book valuation is obtained.

Changes in the fair value of investment property arising at the reporting date are recognised in other comprehensive income and accumulated in the revaluation reserve within equity. Investment property is not depreciated.

Any gain or loss arising on the disposal of an investment property, calculated as the difference between the net proceeds of disposal and the carrying amount of the property at the date of disposal, is recognised in the profit and loss account.

Current tax represents the amount expected to be paid or recovered in respect of taxable profits for the financial year and is calculated using the tax rates and laws that have been enacted or substantially enacted at the Balance Sheet date.

Deferred tax is recognised in respect of timing differences that have originated but not reversed at the balance sheet date, where transactions or events have occurred at that date that will result in an obligation to pay more tax in the future, or a right to pay less tax in the future.

Deferred tax is not recognised on revaluation gains arising on investment properties where the directors consider that the recovery of the carrying amount of the properties will not give rise to a taxable timing difference. In assessing the need for deferred tax, the directors have taken into account the intended manner of recovery of the investment properties and prevailing tax legislation.

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date.