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Financial statements
OCU Group | Annual report and financial statements 2025
Strategic report
Governance
for the year ended 30 April 2025 Notes to the consolidated financial statements
1. Accounting policies continued Intangible fixed assets
Impairment of fixed assets At each reporting end date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash‑generating unit to which the asset belongs. Stocks Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow-moving items. Cash at bank and in hand Cash at bank and in hand are basic financial assets and include cash in hand, deposits held on call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. Financial instruments The Group has elected to apply the provisions of section 11 ‘Basic Financial Instruments’ and section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments apart from derivatives. Financial instruments are recognised in the Group’s statement of financial position when the Group becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. Basic financial assets Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
The Group recognises intangible assets where it is probable that the expected future economic benefits attributable to the asset will flow to the entity and the cost or value of the asset can be measured reliably. Where the Group performs research and development activity, costs relating to the research phase are expensed to profit and loss, with no intangible asset created (where it is not possible to demonstrate that a viable intangible asset capable of delivering probable future economic benefits exists). If sufficient productive research is performed to enable the Group to demonstrate that it is technically feasible to produce an intangible asset which can be used or sold to generate probable future economic benefits, and that it has the resources and intention to complete development on the asset, an internally generated intangible asset may be recognised in respect of further costs incurred to fully develop the asset beyond this point. Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated, using the straight-line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful lives, as follows:
Software
5-10 years straight line
Tangible fixed assets Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Depreciation is recognised so as to write off the cost or valuation of assets less their residual values straight line over their useful lives on the following bases:
Plant and machinery
3-6 years
Leasehold improvements
over period of the lease
Land and buildings Fixtures and fittings
50 years 2-5 years 2-5 years
Motor vehicles
Assets under construction are not depreciated. The assets are depreciated once transferred to their relevant asset class and brought into use. The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
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