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ECLECTIC INTERIORS LTD
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Notes to the financial statements - continued
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for the year ended 31 January 2026
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2
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Accounting policies - continued
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Stocks
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Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete
and slow moving items.
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Work in progress is valued at the lower of cost and net realisable value. Cost is calculated using the first
-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their
present location and condition.
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Taxation
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Taxation for the year comprises current and deferred 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 or deferred 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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Deferred taxation
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Deferred tax is recognised in respect of all timing differences that have originated but not reversed at
the balance sheet date.
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Timing differences arise from the inclusion of income and expenses in tax assessments in periods
different from those in which they are recognised in financial statements. Deferred tax is measured
using tax rates and laws that been enacted or substantively enacted by the balance sheet date and that
are expected to apply to the reversal of the timing difference.
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Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probably
that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
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Hire purchase and leasing commitments
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Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet.
Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held
under finance leases are depreciated over their estimated useful lives or the lease term, whichever is
the shorter.
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The interest element of these obligations is charged to profit or loss over the relevant period. The
capital element of the future payments is treated as a liability.
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Retirement benefits
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The company operates a defined contribution pension scheme. Contributions payable to the company's
pension scheme are charged to profit and loss in the period to which they relate.
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4
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