01
accounting
policies |
The financial statements are prepared in accordance with applicable
accounting standards under the historical cost convention. The
particular accounting policies adopted by the directors are described
below: |
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| i_Basis of consolidation |
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The consolidated financial
statements incorporate the financial
statements of the Company and all of its subsidiary undertakings
using acquisition accounting. The results of subsidiary undertakings
acquired or disposed of during a financial year are included from,
or up to, the effective date of acquisition or disposal. |
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ii_Goodwill |
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Positive goodwill is the excess of the cost of an acquired
entity over the aggregate of the fair values of that entity's
identifiable assets and liabilities. Positive goodwill relating
to acquisitions is shown in the balance sheet as an asset. On
completion of each acquisition the directors estimate the useful
economic life and it is over this period that the goodwill is
amortised on a straight-line basis. For transactions where the
primary objective is the acquisition of customer base, and where
the customer relationships continue under multi-year contract
arrangements, the directors believe it appropriate to ascribe
useful economic lives of up to 20 years. To date all acquisitions
have been assessed by directors to have useful economic lives
of 20 years. In addition to systematic amortisation, the book
value is written down to recoverable amount when any impairment
is identified. |
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iii_Profit for the financial year |
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The Company has taken advantage of section 230 of the Companies
Act 1985 and has not included its own profit and loss account
in these financial
statements. |
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iv_Turnover |
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The Group’s revenues are derived from the sale of software
product licences, the attendant installation, maintenance and
support service revenues, supplies of third party hardware and
software and the provision of PFI compliant finance facilities
offered by third party funders. All revenue is reported exclusive
of value added tax and other sales tax. |
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In the absence of a United Kingdom accounting standard
on revenue recognition, the Group believes that the best guidance
is set out under US GAAP, in particular SOP 97-2 and SAB 101.
The Group’s approach to revenue recognition closely mirrors
US GAAP, with revenue only recognised when: |
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_ persuasive evidence of an arrangement exists; |
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| _ physical delivery has occurred or services have been
rendered; |
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| _ the price to the customer is fixed or determinable; |
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| _ any services deliverable under the supply arrangement
are clearly separable from the software supply; and |
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| _ collectibility is reasonably assured and there are
no material outstanding conditions or contingencies attaching
to the receipt of monies due. |
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v_Recognition of profit |
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Turnover from the sale of software product licences is recognised
at the time the software licence is granted in accordance with
agreed contractual triggers, typically the supply of the software
product to the customer. Revenues from the attendant installation,
maintenance and support services are recognised proportionally
over the period that the services are provided with due regard
for future anticipated costs. Payments received in advance of
services are recorded in the balance sheet as deferred income. |
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vi_Research and development |
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Research and development costs are fully written off in the
year in which they are incurred. |
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vii_Depreciation |
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Depreciation is provided at rates calculated to write down the
cost of tangible assets over their estimated useful life on a
straight-line basis. The annual rates of depreciation, by category
of fixed asset, are as follows: |
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_ office equipment, fixtures and fittings |
12.5% to 20.0% |
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| _ computer equipment |
33.3% |
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| _ motor vehicles |
25.0% |
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