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Gain or loss on disposal

Hi 

Our company just had replacement phone system installed, which was free and we got to keep the old phone system.  We have subsequently sold the old system.  

My question is, should we record a gain or loss on disposal of the old system?  And how will we record the new system on the B/S given no charge for this? 

Thanks

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12th Aug 2017 10:08

Yes - on the assumption that the old system was sold for less than original cost. Compare the sales proceeds with net book value.

Record the new system as an asset acquired at a cost of £0 and depreciate at your normal rates for similar assets.

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12th Aug 2017 10:19

A gain or a loss . . . let me think . . .
Hang on, I'll get out the crystal ball and if that doesn't work I'll try the tarot cards. Alternatively, you could provide some numbers.

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to andy.partridge
12th Aug 2017 11:23

Thanks for the insightful reply. This first reply seemed to understand the question!

I quite like the idea of you using your "crystal ball" or "tarot cards" to answer the question - maybe this approach works for you?? Brings new meaning to the "finger in the air approach" or "what number would you like it to be"

I don't need you to actually work the figures out for me, I was checking my logic.

But thanks for the response anyway!

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to Ianmcgahey
12th Aug 2017 14:10

Still maybe you could let us know whether this is an accounts question or a capital allowances question.

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