disclosure of new addition

disclosure of new addition

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A client has a purchased a van on the last day of their year (31st December) and the paperwork is all in place and the deposit paid etc.

The van arrived in February as some modifications (and other delays) were then undertaken.

In teh 31st December accounts should we ;

a) recognise the van as an asset (£22,000) and the relevant HP liability, or

b) don't recognise but instead treat the deposit as an other debtor and disclose the van as a capital commitment.

I think it is a) but would welcome others input who are greater versed in financial disclosures

Replies (3)

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By aaron01
07th Mar 2012 14:04

You could do either. However recognising the Van in the current year will give you full capital allowance benefit now instead of the following year.

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By Towards excellence
08th Mar 2012 09:09

Needs to be brought into use doesn't it before you can recognise it?

SA

 

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Euan's picture
By Euan MacLennan
08th Mar 2012 10:22

Not either, but a bit of both

If you have a signed HP contract dated 31st December, you must recognise both the FA addition and the HP liability in the accounts to 31st December.  However, you would not depreciate the asset as it has not been used in the business in the year.

s.67(3) CAA 2001 specifies that you can only claim capital allowances when the asset is brought into use in the following year.

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