Page 59 - DWF Annual Report 2017

Notes to the Financial Statements

Year ended 30 April 2017

1. ACCOUNTING POLICIES on the going concern basis. The LLP meets its Tangible fixed assets
The principal accounting policies are funding requirement through the subscription Tangible fixed assets are stated at cost,
of capital by its Members, an overdraft facility
net of depreciation and any provision for
summarised below. They have all been which is renewed annually and a Revolving impairment. Depreciation is provided at
applied consistently throughout the year Credit Facility committed to July 2018. rates calculated to write off the cost less
and to the preceding year.
estimated residual value, of each asset over
General information and basis of Subsequent to year end the firm has held its expected useful life, as follows:
accounting discussions with its banks about its future
The LLP is incorporated in England and Wales borrowing requirements and whilst formal Leasehold Term of lease
bank facility documentation has not been
under the Limited Liability Partnership Act completed, it has received credit committee improvements
2000. The address of the registered office is Fitting out costs 10% per annum or
given on page 74. The nature of the Group’s approval with no conditions precedent from remaining life of lease
the banks of their intention to make available
operations and its principal activities are set new facilities, with documentation due to if lower
out in the Members’ Report on page 49. be completed in February 2018. This newly
The financial statements have been prepared agreed funding will also be a combination of Fixtures and 15% on a reducing
under the historical cost convention, modified a revolving credit facility, overdraft and term fittings balance basis
to include certain items at fair value, and in loans. It will be committed for 3 years through Computer 25% on a straight line
accordance with Financial Reporting Standard to 2021, giving a stable funding platform from equipment basis
102 (FRS 102) issued by the Financial which the LLP will deliver its strategy and
Reporting Council and the requirements of growth plans during that period. Office equipment 20% on a straight line
the Statement of Recommended Practice basis
Accounting by Limited Liability Partnerships
(issued July 2014). Having reviewed the LLP’s forecasts and the Residual value represents the estimated
risks and uncertainties surrounding the current
The functional currency of the LLP is demand for legal services, and other reasonably amount which would currently be obtained
considered to be pounds sterling because possible variations in trading performance, the from disposal of an asset, after deducting
that is the currency of the primary economic Members expect to be able to operate within estimated costs of disposal, if the asset
environment in which the LLP operates. were already of the age and in the condition
The Group financial statements are also its banking facilities and in accordance with the expected at the end of its useful life.
covenants set out in those facility agreements;
presented in pounds sterling. Foreign accordingly they continue to adopt the going
operations are included in accordance with concern basis of accounting in preparing these Financial instruments
the policies set out below. financial statements. Financial assets and financial liabilities are
The LLP meets the definition of a qualifying recognised when the Group becomes a
entity under FRS 102 and has therefore Intangible assets – goodwill party to the contractual provisions of the
taken advantage of the disclosure Goodwill arising on the acquisition of instrument.
exemptions available to it in respect of its subsidiary undertakings and businesses, Financial liabilities and equity instruments
separate financial statements, which are representing any excess of the fair value are classified according to the substance of
presented alongside the Group financial of the consideration given over the fair the contractual arrangements entered into.
statements. Exemptions have been taken value of the identifiable assets and liabilities An equity instrument is any contract that
in relation to financial instruments, acquired, is capitalised and written off on a evidences a residual interest in the assets of
intra-group transactions, remuneration straight line basis over its useful economic the Group after deducting all of its liabilities.
of key management personnel and cash life, which is 5 years. Provision is made for
flow statement. any impairment. All financial assets and liabilities are initially
measured at transaction price (including
transaction costs), except for those financial
Basis of consolidation Intangible assets – negative goodwill assets classified as at fair value through
The Group financial statements consolidate Negative goodwill on the acquisition of profit or loss, which are initially measured at
the financial statements of the LLP and its subsidiary undertakings and businesses, fair value (which is normally the transaction
subsidiary undertakings drawn up to 30 April representing any excess of the fair value of costs), unless the arrangement constitutes
each year. The results of subsidiaries acquired the identifiable assets and liabilities acquired a financing transaction. If an arrangement
or sold are consolidated for the periods from over the fair value of the consideration constitutes a finance transaction, the
or to the date on which control passed. paid, is released to the profit and loss in financial asset or financial liability is
Business combinations are accounted the periods in which non-monetary assets measured at the present value of the future
for under the purchase method. Where acquired are recovered. payments discounted at a market rate of
necessary, adjustments are made to the interest for a similar debt instrument.
financial statements of subsidiaries to Intangible assets – other Financial assets and liabilities are only offset
bring the accounting policies used into line Separately acquired or developed software in the balance sheet when, and only when
with those used by the Group. All intra- is included at the cost and amortised in there exists a legally enforceable right to set
group transactions, balances, income and equal annual instalments over the estimated off the recognised amounts and the Group
expenses are eliminated on consolidation. useful economic life. Provision is made intends either to settle on a net basis, or
In accordance with Section 35 of FRS 102, for any impairment. Intangible assets to realise the asset and settle the liability
Section 19 of FRS 102 has not been applied acquired as part of a business combination simultaneously.
in these financial statements in respect of are measured at fair value at the acquisition Debt instruments which meet the
business combinations affected prior to the date. Subsequently these are amortised in
date of transition. equal annual instalments over their estimated following conditions are subsequently
measured at amortised cost using the
useful economic life. Provision is made for any effective interest method:
Going concern impairment.
These financial statements have been prepared 59