Accounting Policy disclosures

Specific help on the more complex or detailed individual accounting polices to be disclosed in Note 1 to Company and LLP accounts is set out below. This have been updated recently as shown here. Separate guidance on the disclosure of Financial Instruments accounting polices is set out here.

Accounting policy and standard wording Help guidance
General Information & Basis of Preparation - Functional and presentation currency: The financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest £, £000, or £million Where it's obvious that the currency should be GBP, we can say very little here. We only need to talk about "primary economic environments", etc if there's actually a question about what the currency should be… which won't be the case for most of our Silverfin companies.
Going Concern: various sub notes In general these notes have been refined to focus on fewer options. Although the Silverfin default is acceptable, ideally this should be replaced with something specific
Business Combinations: The cost of a business combination is the fair value of consideration paid, including cash, other assets, and the estimated amount of any contingent payments.
This is recorded as an investment in the company's individual financial statements.
 The FC uses simpler wording than the Silverfin template which reflects that we're not using Silverfin for consolidated accounts. This will be revisited if we started creating group accounts in Silverfin.
Turnover and Other Income: Turnover is stated net of VAT and trade discounts and is recognised when the significant risks and rewards are considered to have been transferred to the buyer.
AND
[Sale of goods] Turnover from the sale of goods is recognised when the goods are physically delivered to the customer.
OR
[Rendering of services] Revenue from services is recognised as they are delivered
 In general, standard disclosures such as turnover should be as brief as possible. We have reduced the text from the Silverfin template and you can then expand if further explanation is required. Further examples can be found in T:\Standards team\010 - Projects\001 - Specific projects\_Pre 2020\2018-07 - Accounting policies\Standard Accounting Policies Project. 
Taxation: Deferred tax arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the Company's financial statements. Deferred tax is provided in full on timing differences which result in an obligation to pay more or less tax at a future date, at the average tax rates that are expected to apply when the timing differences reverse, based on tax rates and laws substantively enacted at the balance sheet date. Deferred tax assets and liabilities are not discounted. When Deferred Tax is an asset use: "The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit."
Intangible assets R&D: Research expenditure is written off as incurred. Development expenditure is also written off, except where the director is satisfied as to the technical, commercial and financial viability of individual projects. In such cases, the identifiable expenditure is capitalised as an intangible asset and amortised over the period during which the Company is expected to benefit. This period is between three and five years. Provision is made for any impairment. Ensure this correctly discloses the period over which such capitalised expenditure are amortised (e.g. three to five years), unless development costs are capitalised in intangible assets as that will already happen in the intangibles note.
Borrowing Costs: Borrowing costs which are directly attributable to acquisition, …... Template has been included for completeness but it will rarely be relevant
Leases: Amounts due from lessees under finance leases are recognised as receivables at the amount of the company’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the company’s net investment outstanding in respect of leases. Only to be used if a company has finance lease income but not expense, as otherwise already covered in that note.
Impairment of Fixed Assets: At each balance sheet date, …... Template has been included for completeness but it will rarely be relevant
Stock: Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to the net realisable value.  [MANUFACTURERS, ETC - Cost includes materials, direct labour and an attributable proportion of manufacturing overheads based on normal levels of activity.]  Cost is calculated using the FIFO (first-in, first-out) method. Provision is made for obsolete, slow-moving or defective items where appropriate. If more detail on impairment is needed, the following may be appropriate: "At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss."