3 Accounting policies
Basis of preparation
The
financial statements
have been prepared on the historical cost basis, as modified by the revaluation of certain assets.
The
financial statements
are prepared in sterling, which is the functional currency of the company.
Turnover
Turnover is measured at the fair value of the consideration received or receivable, net of discounts and Value Added Tax. Turnover includes revenue earned from the rendering of professional services. Turnover from the professional services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing costs incurred for work performed to date to the total estimated contract costs. Turnover is only recognised to the extent of recoverable expenses when the outcome of a contract cannot be estimated reliably. Current tax
Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Tangible assets
Tangible assets are initially measured at cost, and are subsequently measured at cost less any accumulated depreciation and accumulated impairment losses or at a revalued amount.
Any tangible assets carried at a revalued amount are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
An increase in the carrying amount of an asset as a result of a revaluation is recognised in other comprehensive income and accumulated in capital and reserves. However, the increase is recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in capital and reserves. If a revaluation decrease exceeds the accumulated revaluation gains accumulated in capital and reserves in respect of that asset, the excess is recognised in profit or loss.
Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:
| Office equipment | 33.33% straight line |
| Fixtures and fittings | 25% straight line |
Financial instruments
Basic financial instruments are recognised at amortised cost, except for investments in non convertible preference and non puttable ordinary shares which are measured at fair value with changes recognised in the profit and loss. Derivative financial instruments are initially recorded at cost and there after at fair value with changes recognised in the profit and loss. Defined contribution pension plan
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
Foreign exchange
The transactions denominated in foreign currency are translated into sterling and recorded at the rate of exchange ruling at the date of the transaction. Balances at the year end denominated in a foreign currency are translated at the rate of exchange ruling at the balance sheet date.