Carphone Warehouse 2002 Annual Report Download - page 32

30 The Carphone Warehouse Group PLC Annual Report 2002
Notes to the financial statements
1Accounting policies
The financial statements have been prepared in accordance with applicable accounting standards under the historical cost convention. The
following principal accounting policies have been applied consistently throughout the period and the preceding period, with the exception
of the change in accounting policy resulting from the adoption of Financial Reporting Standard 19 ‘Deferred Tax’, as detailed in note 10.
a) Turnover
Turnover is stated net of VAT and other sales related taxes. The following accounting policies are applied in each business segment:
Distribution:
Distribution turnover comprises revenue generated from the sale of mobile telephony products and services, commissions receivable on
sales and insurance premiums receivable.
• Commission receivable from network operators, including volume bonuses, is recognised to the extent that it is reasonably certain.
• Insurance premium income is credited to the profit and loss account over the period of the underlying policies.
• All other revenue is recognised as it falls due.
Telecoms services:
Telecoms services turnover comprises revenue generated from facilities management, share of customer airtime spend and loyalty income,
and revenue from mobile network services. All such revenue is recognised as it falls due.
Data services:
All Data services revenue is recognised as it falls due.
b) Basis of consolidation
The consolidated financial statements incorporate the results of The Carphone Warehouse Group PLC and its subsidiary undertakings
drawn up to 30 March 2002. The results of subsidiaries acquired or sold during the period are included from or to the date on which control
passed. Acquisitions are accounted for under the acquisition method.
c) Intangible assets – goodwill
Goodwill arising on the acquisition of subsidiary undertakings and businesses, representing any excess of the fair value of the
consideration given over the fair value of the identifiable assets and liabilities acquired, is capitalised and written off on a straight line basis
over its useful economic life of 20 years. Provision is made for any impairment.
d) Tangible fixed assets
Tangible fixed assets are stated at cost, net of depreciation and any provision for impairment. Depreciation is provided on all tangible fixed
assets at rates calculated to write-off the cost, less estimated residual value, of each asset on a straight line basis over its expected useful
life from the date it is brought into use, as follows:
Computer and office equipment 20%-50% per annum
Fixtures and fittings 20%-25% per annum
Motor vehicles 25% per annum
Short leasehold costs 10 years or the lease term if less
Freehold buildings 2%-4% per annum
e) Stock
Stock is stated at the lower of cost and net realisable value. Cost includes all direct costs incurred in bringing stock to its present location
and condition and represents finished goods and goods for resale.
Net realisable value is based on estimated selling price, less further costs expected to be incurred to disposal. Provision is made for
obsolete, slow-moving or defective items where appropriate.
f) Investments
Fixed asset investments are shown at cost less provision for permanent diminution in value, other than investments which are
independently managed within external funds, which are evaluated on a portfolio basis at the end of the period. Current asset investments
are stated at the lower of cost and net realisable value.