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Rasco Limited
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Notes to the financial statements - continued
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for the year ended 31 December 2025
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2
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Accounting policies - continued
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Financial instruments
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Financial Instruments Financial instruments are recognised in the company’s balance sheet when the company becomes party to the contractual provisions of the instrument. Basic Financial Assets Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price. Basic Financial Liabilities Basic financial liabilities 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. Financial liabilities classified as payable within one year are not amortised. Equity Instruments Equity instruments issued by the company are recorded at the proceeds received. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
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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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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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3
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Average number of employees
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During the year the average number of employees was 2 (2024 - 2).
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4
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