1Accounting Policies

Basis of measurement and preparation of accounts
The accounts have been prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities effective January 2015. The director does not consider A A Plastics Limited to be a going concern, therefore the accounts have been prepared on a break up basis. There has been no financial impairment of A A Plastics assets as a result of the break up basis of valuation.

Turnover policy
Turnover represents the total invoice, excluding value added tax, of sales made during the period and derives from the provision of goods falling within the company’s ordinary activities.

Tangible assets depreciation policy
Depreciation is provided at rates calculated to write off the cost less residual value of each asset over its expected useful life, as follows;
Motor Vehicles – 25% reducing balance
Fixtures, fittings and equipment – 15% reducing balance

Other accounting policies
Leasing and Hire Purchase Commitments
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible assets and depreciated over the shorter of the lease term and their useful lives. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce constant periodic rates of charge on the net obligations outstanding in each period.
Stock
Stock is valued at the lower of cost and net realisable value.
Impairment
At each reporting date, goodwill and other fixed assets, including tangible fixed assets and investments but excluding investment properties, are assessed to determine whether there is an indication that the carrying amount of an asset may be more than its recoverable amount and that the asset should be impaired. If there is an indication of possible impairment, the recoverable amount of an asset, which is the higher of its value in use and its net realisable value, is estimated and compared with its carrying amount. If the recoverable amount is lower, the carrying amount of the asset is written down to its estimated recoverable amount and an impairment loss is recognised in profit and loss.
Deferred Taxation
Deferred tax is recognised in respect of all material timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligations to pay more, or a right to pay less or to receive more tax, with the following exceptions;
• Provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of fixed assets, and gains on disposal of fixed assets that have been rolled over into replacement assets, only to the extent that, at the balance sheet date, there is a binding agreement to dispose of the assets concerned. However, no provision is made where, on the basis of all available evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into replacement assets and charged to tax only where the replacement assets are sold.
• Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
• Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Going Concern
The accounts have not been prepared on a going concern basis as the company is insolvent by £218,466. The company is dependent upon a loan from S G Allard of £35,679 together with a loan from S G A House Services Limited amounting to £160,387, without which it would be unable to continue trading. Mr S G Allard is a director and shareholder of both companies.
The loan account balances mentioned above have both been subordinated to the claims of all other creditors, and will not be repaid until the company is in a solvent position.