Page 81 - Pobl Annual Report FY25

Annual Report 2025 79
Notes to the Financial Statements
for the year ended 31 March 2025
Borrowing costs related to fixed assets
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which
are assets that necessarily take a substantial period
of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as
the assets are substantially ready for their intended
use or sale.
All other borrowing costs are recognised in the
Statement of Comprehensive Income in the period to
which they relate.
Stock
Housing properties under the course of construction
that are being developed for sale or first tranche
shared ownership are treated as housing stock and
presented within current assets.
Cash and cash equivalents
Cash and cash equivalents in the balance sheet
comprise cash at banks and in hand and short-term
deposits with an original maturity date of three months
or less. Bank overdrafts that are repayable on demand
are included within cash and cash equivalents,
otherwise they are shown within borrowings in current
liabilities.
Financial Instruments
The Company and Group has chosen to apply
Sections 11 and 12 of FRS 102 in respect of financial
instruments.
Financial assets carried at amortised cost
Financial assets carried at amortised cost comprise
rent arrears, trade and other receivables and cash and
cash equivalents. Financial assets are initially
recognised at transaction value plus directly
attributable transaction costs. After initial recognition,
they are measured at amortised cost using the
effective interest method. Discounting is omitted where
the effect of discounting is immaterial.
If there is objective evidence that there is an
impairment loss, the amount of the loss is measured
as the difference between the asset’s carrying amount
and the present value of estimated future cash flows
discounted at the financial asset’s original effective
interest rate. The carrying amount of the asset is
reduced accordingly.
A financial asset is derecognised when the contractual
rights to the cash flows expire, or when the financial
asset and all substantial risks and reward are
transferred.
If an arrangement constitutes a financing transaction,
the financial asset is measured at the present value of
the future payments discounted at a market rate of
interest for a similar debt instrument.
Short term debtors and creditors
Short term debtors and creditors with no stated interest
rate receivable and payable within one year are
recorded at transaction price. Any losses from
impairment are recognised in the Statement of
Comprehensive Income in other operating expenses.
Financial liabilities carried at amortised cost
These financial liabilities include trade and other
payables and interest-bearing loans and borrowings.
Non-current debt instruments which meet the necessary
conditions in FRS 102, are initially recognised at
transaction value adjusted for any directly attributable
transaction cost and subsequently measured at
amortised cost using the effective interest method, with
interest-related charges recognised as an expense in
finance costs in the Statement of Comprehensive
Income. Discounting is omitted where the effect of
discounting is immaterial.
A financial liability is derecognised only when the
contractual obligation is extinguished, that is, when the
obligation is discharged, cancelled or expires.
Assets received through non-exchange
transactions
Assets received through non-exchange transactions
(donations and legacies) are included in the Statement
of Financial Position at fair value if this exceeds the
Group capitalisation threshold.
Income equivalent to the difference between any
amounts paid or payable for the assets and the fair
value are recognised in the Statement of
Comprehensive Income as a donation when future
performance related conditions are met.
1.3. Summary of significant accounting policies (continued)