Page 52 - Annual Review 2015-2016

Notes to the Financial Statements

Year ended 30 April 2016

1. ACCOUNTING POLICIES Section 19 of FRS 102 has not been applied Leasehold Term of lease
The principal accounting policies are in these financial statements in respect of improvements
summarised below. They have all been business combinations affected prior to the
applied consistently throughout the year and date of transition. Fitting out costs 10% per annum or
to the preceding year. remaining life of lease
Going concern if lower
General information and basis These financial statements have been Fixtures and 15% on a reducing
of accounting prepared on the going concern basis. The fittings balance basis
The LLP is incorporated in the United LLP meets its funding requirement through Computer 25% on a straight line
Kingdom under the Limited Liability the subscription of capital by its Members and equipment basis
Partnership Act 2000. The address of the through an overdraft facility which is due for
registered office is given on page 69. The renewal on July 2017 as well as a Revolving Office equipment 20% on a straight line
nature of the group’s operations and its Credit Facility committed to July 2018, giving basis
principal activities are set out in the Members’ a stable funding platform from which the
Report on page 41. LLP will deliver its strategy and growth plans
The financial statements have been prepared during that period. Residual value represents the estimated
under the historical cost convention, modified Having reviewed the LLP’s forecasts and amount which would currently be obtained
to include certain items at fair value, and in the risks and uncertainties surrounding the from disposal of an asset, after deducting
accordance with Financial Reporting Standard current demand for legal services, and other estimated costs of disposal, if the asset
102 (FRS 102) issued by the Financial reasonably possible variations in trading were already of the age and in the condition
Reporting Council and the requirements of performance, the Members expect to be able expected at the end of its useful life.
the Statement of Recommended Practice to operate within its banking facilities and in
Accounting by Limited Liability Partnerships accordance with the covenants set out in
(issued July 2014). those facility agreements; accordingly they Financial instruments
The prior year financial statements were continue to adopt the going concern basis Financial assets and financial liabilities are
restated for material adjustments on adoption of accounting in preparing these financial recognised when the Group becomes a
of FRS 102 in the current year. For more statements. party to the contractual provisions of the
information see note 21. instrument.
The functional currency of the LLP is Intangible assets – goodwill Financial liabilities and equity instruments
considered to be pounds sterling because Goodwill arising on the acquisition of are classified according to the substance of
that is the currency of the primary economic subsidiary undertakings and businesses, the contractual arrangements entered into.
environment in which the LLP operates. The representing any excess of the fair value of An equity instrument is any contract that
Group financial statements are also presented the consideration given over the fair value of evidences a residual interest in the assets of
in pounds sterling. Foreign operations are the identifiable assets and liabilities acquired, the Group after deducting all of its liabilities.
included in accordance with the policies set is capitalised and written off on a straight line All financial assets and liabilities are initially
out below. basis over its useful economic life, which is 5 measured at transaction price (including
The LLP meets the definition of a qualifying years. Provision is made for any impairment. transaction costs), except for those financial
entity under FRS 102 and has therefore taken assets classified as at fair value through
advantage of the disclosure exemptions Intangible assets – other profit or loss, which are initially measured at
available to it in respect of its separate Separately acquired or developed software fair value (which is normally the transaction
financial statements, which are presented is included at cost and amortised in equal price excluding transaction costs), unless
alongside the Group financial statements. annual instalments over the estimated useful the arrangement constitutes a financing
Exemptions have been taken in relation to economic life. Provision is made for any transaction. If an arrangement constitutes
financial instruments, cash flow statement, impairment. a finance transaction, the financial asset or
intra-group transactions and remuneration of Intangible assets acquired as part of a financial liability is measured at the present
key management personnel. business combination are measured at fair value of the future payments discounted
at a market rate of interest for a similar
value at the acquisition date. Subsequently debt instrument.
Basis of consolidation these are amortised in equal annual Financial assets and liabilities are only offset in
The Group financial statements consolidate instalments over their estimated useful the balance sheet when, and only when there
the financial statements of the LLP and its economic life. Provision is made for any exists a legally enforceable right to set off the
subsidiary undertakings drawn up to 30 April impairment. recognised amounts and the Group intends
each year. The results of subsidiaries acquired either to settle on a net basis, or to realise the
or sold are consolidated for the periods from Tangible fixed assets asset and settle the liability simultaneously.
or to the date on which control passed. Tangible fixed assets are stated at cost net of Debt instruments which meet the following
Business combinations are accounted depreciation and any provision for impairment. conditions are subsequently measured at
for under the purchase method. Where Depreciation is provided at rates calculated amortised cost using the effective interest
necessary, adjustments are made to the to write off the cost less estimated residual method:
financial statements of subsidiaries to value, of each asset over its expected useful (a) The contractual return to the holder is (i) a
bring the accounting policies used into line life, as follows: fixed amount; (ii) a positive fixed rate or a
with those used by the Group. All intra- positive variable rate; or (iii) a combination
group transactions, balances, income and of a positive or a negative fixed rate and a
expenses are eliminated on consolidation. positive variable rate.
In accordance with Section 35 of FRS 102,