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CASBURN WAYMAN COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
2.Accounting policies (continued)
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
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 trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Impairment losses on financial assets are recognised using the expected credit loss (ECL) model at each reporting date. Expected credit losses represent a probability-weighted estimate of credit losses and incorporate historical experience, current conditions and forward-looking information, including macroeconomic factors, discounted at the asset’s original effective interest rate.
For trade debtors and contract assets, the simplified approach is applied and lifetime expected credit losses are recognised from initial recognition.
For other financial assets, a loss allowance equal to 12-month expected credit losses is recognised on initial recognition. Where credit risk has increased significantly since initial recognition, or where the asset is credit-impaired, lifetime expected credit losses are recognised.
Loss allowances are recognised in profit or loss through an allowance account and are reversed where appropriate if credit risk improves, subject to the carrying amount not exceeding the amount that would have been recognised had no impairment occurred.
Basic financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
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