When analysing a company's fixed asset additions for capital allowances how do you distinguish between what is capital and what can be classified as revenue in capital?
In particular, if a company were to pay to hire a piece of machinery or equipment e.g. a lorry, a crane or a forklift, as the actual asset is capital can you claim it as revenue in capital or would the cost of hiring this capital asset have to be main pool addition?
If you could provide reference to legislation that would help.
Thanks.
Replies (3)
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I strongly advise ...
you speak to your accountant or, if you don't have one, engage one.
Not a fixed asset
If you are hiring a piece of equipment this isn't a fixed asset in the first place.
Hire purchase or finance lease
If you are hiring a piece of equipment this isn't a fixed asset in the first place.
Unless it's acquired on hire purchase or a finance lease, in which case it's a fixed asset for accounting purposes.