Statement of compliance

These financial statements have been prepared in compliance with FRS 102 – The Financial Reporting Standard applicable in the UK and Republic of Ireland and the Companies Act 2006.

Basis of preparation

The financial statements have been prepared under the historical cost convention as modified by the revaluation of land and buildings and certain financial instruments measured at fair value in accordance with the accounting policies.

The financial statements are prepared in sterling which is the functional currency of the company.

The financial statements have been prepared on a going concern basis.

The directors have considered the company's financial position, rental income, ongoing operating costs and mortgage commitments. Based on their assessment, the directors consider that the company has adequate resources to continue operating for the foreseeable future and therefore consider the going concern basis of accounting to be appropriate.

Turnover represents rental income receivable from the letting of residential investment properties. Rental income is recognised on a straight-line basis over the term of the tenancy agreements.

Taxation represents the sum of tax currently payable and deferred tax. Tax is recognised in the statement of income, except to the extent that it relates to items recognised in other comprehensive income or directly in capital and reserves.
The company’s liability for current tax is calculated using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Current and deferred tax assets and liabilities are not discounted

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the reporting date.


Deferred tax is recognised on changes in the fair value of investment properties where the accounting carrying amount differs from the amount deductible for tax purposes. Deferred tax relating to investment properties is measured using the tax rates and allowances applicable to the sale of the properties.


Deferred tax is measured using tax rates and laws enacted or substantively enacted by the reporting date that are expected to apply when the timing differences reverse.


Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.


Current and deferred tax assets and liabilities are not discounted.

Investment properties are properties held to earn rental income and/or for capital appreciation.

Provisions are recognised when the company has a present obligation as a result of a past event which it is more probable than not will result in an outflow of economic benefits that can be reasonably estimated.

The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to its financial instruments.


Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument.


Basic financial assets
Basic financial assets, including cash at bank and other receivables, are initially recognised at transaction price and subsequently measured at amortised cost, where applicable, less any impairment losses.


Basic financial liabilities
Basic financial liabilities, including trade and other creditors, directors' loans and mortgage borrowings, are initially recognised at transaction price, adjusted for directly attributable transaction costs where applicable.


Mortgage borrowings are subsequently measured at amortised cost using the effective interest method.


Transaction costs directly attributable to obtaining mortgage finance are incorporated into the calculation of the effective interest rate and recognised in profit or loss as finance costs over the relevant term of the borrowing.


Interest expense is recognised in profit or loss using the effective interest method.


Offsetting
Financial assets and financial liabilities are offset only when the company has a legally enforceable right to offset the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.