annington annual rep 2019-web - Page 65



Financial statements | Notes to the financial statements
Notes to the financial statements
13. INVENTORY
ACCOUNTING POLICY
2019
£’000
Inventory consists of land and buildings held for development
and is valued at the lower of cost and net realisable value.
Cost represents the acquisition price including legal and
other professional costs associated with the acquisition,
together with subsequent development costs, net of amounts
transferred to costs of sale. Net realisable value is the expected
sale proceeds that the Group expects on sale of a property or
current market value net of associated selling costs.
Work in progress
2019
£’000
2018
£’000
8,576
5,732

The cost of inventories recognised as an expense and included
in cost of sales amounted to £286,048 (2018: £nil).
Inventory has been written down to its net realisable value
during the year by £67,535 (2018: £nil).
14. TRADE AND OTHER RECEIVABLES
ACCOUNTING POLICY
Trade and other receivables are initially recognised at fair value,
subsequently measured at amortised cost using the effective
interest method and less any provision for impairment.
Impairment provisions for receivables are recognised based on
a forward looking expected credit loss model.
Trade receivables and contract assets
The Group applies the simplified approach in measuring
expected credit losses for its trade receivables and contract
assets. A provision matrix is used to measure expected credit
losses whereby trade receivables are grouped on similar credit
risk and aging, with credit loss percentages applied based on
historical performance.
Amounts falling due within one year
Trade receivables
Sundry receivables
23
19
3,084
36
Other taxation and social security
86
41
Prepayments and accrued income
443
511
3,636
607
16. TRADE AND OTHER PAYABLES
ACCOUNTING POLICY
2019
£’000
The carrying value of trade and other receivables approximates
the fair value.
Trade receivables are stated after provisions for impairment of
£10,623 (2018: £17,809).
Corporation tax
Taxes and social security
Deferred income
Retention creditors
15. CASH AND CASH EQUIVALENTS
ACCOUNTING POLICY
Other
Cash and cash equivalents comprise cash at bank, short-term
deposits and short-term highly liquid investments that are
readily convertible to known amounts of cash and that are
subject to an insignificant risk of changes in value.
Amounts falling due after one year
Short-term investments relate to shares held in an investment
company that holds highly liquid cash funds. The fair value of
the short-term investments has been determined based on
the redemption rules as set out in the product’s prospectus.
Redemption requests can be made at any time on a dealing
day as set out in the product’s prospectus.
Cash and cash equivalents are limited to instruments with a
maturity of less than three months.
2019
£’000
2018
£’000
Cash at bank
46,218
12,816
Short-term deposits
29,084
43,338
Short-term investments
87,481
100,453
162,783
156,607
2018
£’000
Amounts falling due within one year
Trade payables
Accruals
Retention creditors
2019
£’000
2018
£’000
Finance lease liability
117
-
Total current loans and borrowings
117
-
Amounts falling due within one year
Trade and other payables are recognised initially at fair value
and subsequently measured at amortised cost using the
effective interest method.
Accruals
Cash and cash equivalents
64 | Annington Limited Annual Report & Accounts 2019
2018
£’000
Amounts falling due between one and five years
Unsecured bank loans
Finance lease liability
396,904
396,010
119
-
397,023
396,010
2,974,173
2,981,489
2,974,173
2,981,489
2,080
415
34,120
32,032
2,087
-
192
728
43,934
40,598
983
-
52
-
Total non-current loans and
borrowings
3,371,196
3,377,499
83,448
73,773
Total loans and borrowings
3,371,313
3,377,499
Amounts falling due after five years
Unsecured notes

A reconciliation of debt movement is provided in Note 27.
-
202
127
-
127
202

The carrying value of trade and other payables approximates
the fair value.
17. LOANS AND BORROWINGS
ACCOUNTING POLICY
Loans and borrowings are initially recognised at fair value less
the transaction costs directly attributable to their issue. After
initial recognition, interest bearing loans and borrowings are
subsequently measured at amortised cost using the effective
interest rate method, such that discounts and costs are charged
to the income statement over the term of the borrowing at a
constant return on the carrying amount of the liability. The debt
and associated accrued interest is classified as current and noncurrent based on the contractual payments required within 12
months of the balance sheet date.
18. PROVISIONS
ACCOUNTING POLICY
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event,
it is probable that the Group will be required to settle that
obligation and a reliable estimate can be made of the amount
of the obligation.
The amount recognised as a provision is the best estimate
of the consideration required to settle the present obligation
at the balance sheet date, taking into account the risks and
uncertainties surrounding the obligation. When a provision is
measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those
cash flows (when the effect of the time value of money
is material).
Annington Limited Annual Report & Accounts 2019 | 65

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