Statement of accounting policies Basis of preparation These financial statements are prepared on the going concern basis, under the historical cost convention and in accordance with the Companies Act 2006 and applicable accounting standards in the United Kingdom. The principal accounting policies, which have been applied consistently throughout the year, are set out below.
Basis of consolidation The Group profit and loss account and balance sheet include the audited financial statements of the Company and all of its subsidiaries prepared to the end of the financial year. The results of subsidiaries acquired are included in the consolidated profit and loss account from the date control passed to the Group. Intra-Group sales and profits are fully eliminated on consolidation. On acquisition of a subsidiary, all of the subsidiary's assets and liabilities are recorded at their fair values reflecting their value at that date. Any interest rate derivatives held by the acquired subsidiary are also recorded at fair value using the provider’s valuation on the date of acquisition. In-the-money derivatives are carried as a financial asset in the balance sheet, while out-of-the-money derivatives are carried as a financial liability.
Joint ventures and associates Joint ventures compromise investments in undertakings where the Group holds an interest on a long-term basis and jointly controls the commercial and financial policy of the venture with one or more other ventures under a contractual arrangement. The Group’s share of the result of its investment in joint ventures is included in the consolidated profit and loss account if material to the Group. In the consolidated balance sheet the investment in joint ventures is included as the group share of net assets of the year end. Associated undertakings are entities over which the group has significant influence. The group’s share of the profits less losses of associated undertakings net of tax, interest and non-controlling interests is included in the consolidated profit and loss account and the group’s share of net assets is shown within interests in associates in the consolidated balance sheet. The group’s share of associates with net liabilities are shown within other provisions. The group’s share of the profits less losses and net assets is based on current information produced by the undertakings, adjusted to conform with the accounting policies of the group. Associates and joint ventures are shown in the parent company balance sheet at cost less any amounts written off for permanent diminution in value.
Turnover and profit recognition: Private house building, property development and land sales Turnover and profits on these activities are included in the financial statements on legal completion. Where house sales include an interest free loan provided by the Company to the customer in respect of an element of the sale value (shared equity house sales), this is recognised in turnover net of discounting using an estimated financing cost.
Keepmoat Annual Report and Financial Statements 2012Annual Report and Financial Statements 2012
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