Abbreviated Company Accounts - EARL LIMITED

1Accounting Policies

Basis of measurement and preparation of accounts
The full financial statements, from which these abbreviated accounts have been extracted, have been prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities (effective January 2015).

Turnover policy
Turnover represents the gross proceeds from sale of development properties. Profit on the sale of developed properties is taken when exchanged contracts become unconditional.

Tangible assets depreciation policy
Depreciation
Depreciation is provided on tangible fixed assets so as to write off the cost or valuation, less any estimated residual value, over their expected useful economic life as follows:

Plant and machinery 15% per annum

Valuation information and policy
Investment properties
In accordance with the Financial Reporting Standard for Smaller Entities (effective January 2015), the company's properties are held for long-term investment and are included in the balance sheet at their open market values. The surpluses or deficits on revaluation of such properties are transferred to the investment property revaluation reserve.
Depreciation is not provided in respect of freehold investment properties. Leasehold investment properties are not amortised where the unexpired term is over twenty years.
This policy represents a departure from statutory accounting principles, which require depreciation to be provided on all fixed assets. The directors consider that this policy is necessary in order that the financial statements may give a true and fair view because current values and changes in current values are of prime importance rather than the calculation of systematic annual depreciation. Depreciation or amortisation is only one of many factors reflected in the annual
valuation and the amount which might otherwise have been shown cannot be separately identified or quantified.

Other accounting policies
Work in progress
Stocks, being development work in progress, consists of properties under development for future resale. These assets are included in the financial statements at the lower of cost and net realisable value as valued by the director having regard to market conditions. Cost for this purpose comprises the purchase cost of land and buildings, development expenditure and attributable overheads. Attributable interest is included up to the point that the development is complete. In considering the net realisable value of land and property it is assumed developments will be completed and sold in the ordinary course of business and they would not be placed on the market for immediate sale.
Included in stock is capitalised interest amounting to £49,190 (2015: £49,190).