I have a client whose trailer (plant and machinery fixed asset) had original cost of in 2016 0f £19,000 and a NBV at start of the current accounting year of £7,600. He has had the trailer revalued (he's moving from micro entity to small comany accounts) at £15,000. I am not 100% of the accounting treatment of this....
Do I make an adjustment of £7,400 to accumulated depreciation in the BS and depreciation in the p&l and then charge depreciation based on £15,000 or do I treat asset as sold (take out NBV) and bring in an 'addition' at £15,000 and depreciate that. Does this depend on the timing of the revaluation ie at start of year or end of year.
To add another layer to this....the old accountant used depreciation of 20% straight line but the client is now saying this is wrong and he now wants it depreciated over 10 years ie at 10%. Do I just depreciate at the new rate going forward or do I make an historic adjustment as if it was 10 years from year it was bought?
Any help would be grateful - I have just started a new job and this is the first task I have been set