Transfer of property from trading stock into fixed assets
A Company whose main activity is that of holding properties for commercial rental also owns a further property which was acquired for renovation. The initial intention had been to do up this property and then sell it. As such the cost value of the property enhanced by the costs of the renovation is within trading stock.
The directors are now considering retaining the property to rent out so would add this to their existing portfolio of rental properties. Assuming this happens, I need to transfer it from stock to fixed assets.
Am I right in thinking that I can do this at cost? Therefore no profit element will arise at this stage and the cost in fixed assets will be the same as that currently reflected in stock. Presumably there is no need for this to be a transaction at market value?