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1 Accounting policies (continued)
Depreciation Freehold land is not
depreciated. Leasehold property is depreciated over the period of
the lease. Freehold buildings, plant and machinery, vehicles, fixtures,
fittings, tools and equipment are depreciated over their estimated
useful lives on a straight line basis. Estimates of useful lives
of these assets are:
Buildings
Plant and machinery
Vehicles
Fixtures, fittings, tools and equipment |
10 – 50 years
2 – 20 years
2 – 10 years
3 – 20 years |
Stocks are stated at cost or net
realisable value, whichever is the lower. Cost, in the case of manufactured
goods, includes direct and overhead expenses attributable to manufacture.
Taxation Deferred taxation is recognised
in respect of all timing differences that have originated but not
reversed at the balance sheet date where transactions or events
have occurred at that date that will result in an obligation to
pay more, or right to pay less or to receive more, tax, with the
following exceptions:
- Provision is made for tax on gains arising from the revaluation
of fixed assets, or gains on disposal of fixed assets, only to
the extent that, at the balance sheet date, there is a binding
agreement to dispose of the assets concerned. However, no provision
is made where, on the basis of all available evidence at the balance
sheet date, it is more likely than not that the taxable gain will
be rolled over into replacement assets
- Provision is made for gains which have been rolled over into
replacement assets only to the extent that, at the balance sheet
date, there is a commitment to dispose of the replacement assets
- Provision is made for deferred tax that would arise on remittance
of the retained earnings of overseas subsidiaries, associates
and joint ventures only to the extent that, at the balance sheet
date, dividends have been accrued as receivable
- Deferred tax assets are recognised only to the extent that the
directors consider that it is more likely than not that there
will be suitable taxable profits from which the underlying timing
differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates
that are expected to apply in the periods in which timing differences
reverse.
Government grants Grants against capital
expenditure from government and other bodies are accrued and released
to the profit and loss account over the period during which the
relevant assets are depreciated.
2 Segmental information
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