Accounting policies
Borrowing costs
Borrowing costs which are directly attributable to the acquisition or construction of qualifying assets are capitalised. They are defined as the borrowing costs that would have been avoided if the expenditure on the qualifying asset had not been made. All other borrowing costs which are not capitalised are charged to finance costs, using the effective interest rate method.
Finance income and costs
Interest income is accounted for on an accruals basis using the effective interest method.
Finance costs comprise obligations on finance leases and borrowings and are recognised in the period in which they fall due.
Finance income and costs
| 52 weeks
ended
30 November
2014
£m | 52 weeks
ended
1 December
2013
£m |
|---|
| Interest on cash balances | 0.4 | 0.4 |
| Finance income | 0.4 | 0.4 |
| Borrowing costs | | |
| — Obligations under finance leases | (8.7) | (4.7) |
| — Borrowings | (0.9) | (3.6) |
| Capitalised borrowing costs | — | 1.1 |
| Fair value movement in derivative financial instruments | 0.1 | (0.2) |
| Finance costs | (9.5) | (7.4) |
| Net finance costs | (9.1) | (7.0) |
The fair value movement in derivative financial instruments arose from fair value adjustments on the Group's cash flow hedges.