Hello All
I am a question about property deprication . My client is running a SPV company, who has purchased two residential properties and rented them out. One property is leasehold, the other one is on freehold. Now I am doing annual account for her. I am wondering How I shall calculate the depreciation for those two properties. Many thanks,
Caroline.
Replies (11)
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Is an SPV company just a normal company?
Or is it special
Why depreciate?
Are they losing value
If they are investment properties, as they appear to be from what you say, you don’t depreciate them. Full stop.
John. doesn't it differ depending on whether FRS105 accounts or FRS102?
https://www.accountingweb.co.uk/business/financial-reporting/frs-105-mic...
If you are encouraging your clients to call companies 'SPV's' - please stop now. It is the most annoying and meaningless term going.
oh, i thought it was only me, such a wind up, all these new "property developers" thinking their company is special
Unfortunately, I don't think this terminology is going anywhere. It seems to be particularly endemic in the property world and mortgage lenders will regularly require an "SPV" to be created.
Of course, anyone who is reasonably sensible, knows that a SPV in this circumstance is just a bog standard Ltd co set up for £12 at Companies House. In reality a "proper" SPV should have appropriate restrictions written into the M&As of the company but this is disappointingly an infrequent occurence. In addition a SPV's purpose is to ring fence risk for the owners of the entity so any cross guarantees/PGs etc immediately neuter the purpose of creating said SPV...
Wow you've done well!Hello All
I am a question about property deprication . My client is running a SPV company, who has purchased two residential properties and rented them out. One property is leasehold, the other one is on freehold. Now I am doing annual account for her. I am wondering How I shall calculate the depreciation for those two properties. Many thanks,
Caroline.
On 5 June you worked for a logistics company:-
https://www.accountingweb.co.uk/any-answers/is-distribution-cost-classif...
By 26 June you had clients which you were doing self assessment tax returns for:-
https://www.accountingweb.co.uk/any-answers/self-assessment-accounting-p...
And now you are preparing accounts for 'SPV companies".