Financial Statements
(a) Accounting policies
Accounting basis
The financial statements are prepared in accordance with applicable United Kingdom law and Accounting Standards (UK GAAP) and under the historical cost convention as modified by the revaluation of investment properties and fixed asset investments.
These accounts incorporate the following new UK Accounting Standards: FRS 21 'Events after the balance sheet date', FRS 23 'The effects of changes in foreign exchange rates', FRS 25 'Financial instruments: disclosure presentation', FRS 26 'Financial instruments: measurement' and FRS 28 'Corresponding amounts'.
Except as set out below, the accounting policies applied by the Company are consistent with those applied by the Group, as stated in note 1 of the consolidated financial statements, and have been applied consistently throughout the current and the previous year.
Financial instruments
Treatment of financial instruments is consistent with the Group for the current year. There has been no prior year restatement as allowed under FRS 26.
In the prior year, amounts payable or receivable under interest rate derivatives are matched with the interest payable on the debt which the derivatives hedge. If a derivative was closed out in the prior year, any surplus/deficit arising was credited/charged to the profit and loss account and included in net interest payable.
Investments
Investments in joint ventures are stated at cost less provision for impairment. Investments in subsidiaries are stated at cost or directors' valuation less provision for impairment.
Deferred taxation
Deferred tax is not recognised when fixed assets are revalued unless by the balance sheet date there is a binding agreement to sell the revalued assets and the gain or loss expected to arise on the sale has been recognised in the financial statements.
A deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.