Fixed asset help ?

Fixed asset help ?

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This is the first time I've come across this issue and am unsure how to proceed (I have only been in practise a few months)
A new client has approached me having been with the same accountant since they started trading 6 years ago (they are a small ltd company). The previous accountant has left them in the lurch - ie- disappeared off the face of the planet. I have tried searching for said "accountant" who appears to not even exist !
The only paperwork the client has from the old accountant are statutory accounts containing no notes whatsoever ! The main issue I'm having is with the clients fixed assets, I have no idea what makes up the figures, the depreciation methods etc. I sat down and went though everything with her and the assets she currently has as well as any additions, the only existing asset she has is the company van, but this doesn't reflect in the previous accounts as the latest fixed asset figure is nearly twice what the initial cost of the van was, so I literally have no idea how to proceed with this .... Help ?

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By User deleted
08th Jul 2014 18:54

Simples

Identify which year the assets (whatever they were) were purchased from the accounts you have (the movement in NBVs on the balance sheets as adjusted by the depreciation shown in the P&Ls will tell you if there were additions). Then go back to the accounting records for that year and look for entries or invoices that add up and look appropriate. If it's a small company there can't be that much (hopefully) to go through. Then once you've identified what's been capitalised you can work out the depreciation each year (which should in theory agree to the P&L figures) and then its just a case of checking with the client what assets she still has.

Depreciation-wise it's probably going to be 20% or 25% straight line. 

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By occca
08th Jul 2014 19:31

Download the accounts from Companies House

The depreciation policy should be in them

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By buttinski
08th Jul 2014 19:44

Corporation Tax Return and Comps

Will also be required!

HMRC should be prepared to help with this and (if your luck is in) there might be some F.A. information that is of use.

You say the only asset she has is the van, but what about equipment (office and other) desks, chairs, computers, printers etc.,?

If you are certain that your client is being totally straight with you, then you may need to take the cost of the van, work out the depreciation (as suggested by Flash) to arrive at a nbv, then take out the surplus figures as disposals at no proceeds and create (presumably) a loss on disposal.

Or just carry on as you are, until ....................... i.e. do you actually need to know what makes up the figures (other than to ensure that the balance sheet value is not overstated).

There will be any number of small company balance sheets still showing, in cost and depreciation, assets that were disposed of, scrapped, or stolen, many years ago, so  I wouldn't stress too much.

Finally, I am assuming that your predecessor was not qualified, but if he/she was, you could enquire of their professional body as to their whereabouts.  They might not tell you but they might be prepared to forward a letter.

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