Depreciation charge will show massive losses on accounts

Hi everyone,

 

A Club is looking to buy a new building for the business costing £400,000. The Club currently breaks even on the accounts. If the new building is depreciated 20% per annum, the accounts are going to show a very large loss. Is there any ways to combat this? And, what is the best way to explain this to the members that will be funding this new building, and then getting terrible accounts?

 

Thanks in advance for any replies.

Comments
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20% ?

Discountants |
Discountants's picture

why depreciate?

BigBadWolf |
BigBadWolf's picture

Cash flow

zebaa |

1% should be OK

Tonykelly |
Tonykelly's picture

Club is a very broad term.

Chris Smail |
Chris Smail's picture

I think you must depreciate,

Towards excellence |

Towards Excellence, I don't agree!

Richard Willis |
Richard Willis's picture

I agree you must depreciate

paulwakefield1 |

All tangible fixed assets,

AdShawBPR |

Correct, but....

andyhopkins |

same result?

AdShawBPR |

Depreciate or not to depreciate, is not the answer?

hansk12 |

Saving of existing cost?

Alf |