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Fixed Asset costs incorrectly stated in BS

How to correct asset cost values with historic inaccuracies

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It has become apparent that the historic asset costs stated in the financial statements are incorrect.  The former accountant for my client never assessed the entries in the accounting system, instead, she relied on the TB figures from Sage to draw up the accounts.  Therefore, numerous items of overhead expenditure were incorrectly coded to the asset nominals. 

I instructed the client to make a list of the company assets for me to create an asset register, as a result it has highlighted the fact that the assets are considerably overstated in the accounts.  I would like to ensure that, going forward, the accounts are a true reflection of the company's position and therefore want to report the true cost of assets currently held in the business.

I was looking for advice on the best process in achieving this please?  I do not have any historic fixed asset register, nor details of assets since 16/17 due to the system being wiped of history.

Thanks in advance

Replies (3)

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By Accountant A
22nd May 2019 10:57

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Hallerud at Easter
22nd May 2019 11:05

Cr Fixed asset Cost
Dr Overhead costs

Dr Fixed asset Depreciation (re above)
Cr Depreciation charge for year (Prior year adjustment)

You also possibly have some adjusting to do re Capital Allowances/ AIA claimed. I detail the acquired assets in the tax software each year using TaxCalc, how has other accountant recorded matters in the tax calculations- this might help you reconstructing?

No idea how significant/material all this is re the accounts but reopening the last completed accounts may instead be required rather than merely current year adjustment

What sort of entity is this?

When you say since 2016/2017 do you actually mean prior to 2016/2017?

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By WhichTyler
22nd May 2019 13:49

prior yera adjustment I reckon : work out what it should have been and restate comparatives...

Tax is another matter

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