Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Freehold land and buildings
Freehold land and buildings are stated at cost less accumulated depreciation and accumulated impairment losses.
Land is not depreciated as it is considered to have an indefinite useful economic life.
Buildings are depreciated so as to write off their depreciable amount over their estimated useful economic lives. In determining the depreciable amount, the directors have considered the expected residual value of the property at the end of its useful economic life. Having regard to the nature, condition and expected long term value of the property, the directors consider that the residual value will remain significant and accordingly depreciation is charged at £100 per annum.
The estimated useful economic life and residual value of the property are reviewed annually and revised prospectively where appropriate.
Holiday home / Caravan
The holiday home is stated at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is provided on a straight-line basis over 20 years, being the term of the pitch licence under which the holiday home is occupied. The directors consider that the economic benefits of the asset will be consumed over the term of the licence and, accordingly, the licence term represents the asset’s useful economic life for depreciation purposes.
The residual value of the asset is reviewed at each reporting date and, where appropriate, revised prospectively.
Depreciation is provided at rates calculated to write off the cost of the fixed assets, less their estimated residual value, over their expected useful lives on the following bases: