Micro-entity Accounts - PRECISION RAILWAY ENGINEERING LIMITED

2Accounting Policies

Basis of measurement and preparation of accounts
These financial statements for the year ended 31 January 2017 are the first financial statements that comply with FRS 102
Section 1A small entities. The transition date is 1 February 2015.

The financial statements have been prepared under the historic cost convention,except that as disclosed in the accounting
policies, certain items are shown at fair value. The presentational currency is in sterling which has been rounded to the nearest
£1.

Turnover policy
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in
the course of the company's activities and is shown net of sales/value added tax, returns, rebates and discounts. Income is
recognised when goods/services have been delivered/provided to clients should that risk and rewards of ownership have
transferred to them.

Tangible assets depreciation policy
Tangible fixed assets are stated at cost less accumulated depreciation and accumulative impairment losses.

Depreciation is calculated so as to write off the cost of an asset, net of anticipated disposal proceeds, over the useful economic
life of that asset as follows:
Office equipment - 33% straight line
Fixtures & fittings - 15% reducing balance
Motor vehicles - 25% reducing balance
Plant and machinery - 15% reducing balance

Other accounting policies
Stocks
Stock has been valued at the lower of cost and estimated selling price less costs to sell.

Foreign Currency
Transactions in foreign currency are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. All differences are taken to the profit and loss account.

Pension Costs
The company operates a defined contribution pension scheme and the pension cost charge represents the contributions payable by the company to the fund in respect of the period. The assets of the scheme are held separately from those of the company in an independently administered fund.

Deferred Tax
Deferred Taxation is provided on the liability method to take account of timing differences between treatment of certain items for accounts purposes and their treatment for tax. Tax deferred or accelerated is accounted for in respect of all material timing differences.
Leasing
Property, plant and equipment acquired under finance leases or hire purchase contracts are capitalised and depreciated. Rentals payable under operating leases are charged to the statement of income and retained earnings on a straight line basis over the period.
Financial Instruments
The following assets and liabilities are classified as financial instruments - trade debtors, trade creditors, bank loans and directors loans. Bank Loans are initially measured at the present value of future payments, discounted at the market rate of interest and subsequently at amortised cost using the effective interest method. Directors Loan (being repayable on demand), trade debtors and trade creditors are measured at the undiscounted amount of the cash or other consideration expected to be paid or received. Financial assets that are measured at amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Income and Retained Earnings.
Going Concern
The director reviews the financial position of the company from the date of approval of the accounts on an ongoing basis, and concludes that the company is able to meet all its liabilities as they fall due.