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Revaluing plant and machinery

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Hi

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 

 

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By Paul Crowley
25th Oct 2021 15:49

Other identical thread missing?
It was still there this morning

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Replying to Paul Crowley:
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By Tax Dragon
25th Oct 2021 16:06

Did it contain anything useful?

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Replying to Tax Dragon:
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By Hugo Fair
25th Oct 2021 18:45

Not unless one enjoys reading the output of another OP suffering a slow meltdown before descending into puerile responses.

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Replying to Tax Dragon:
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By Paul Crowley
25th Oct 2021 19:03

23rd Oct 2021
Edit
You also need to rewrite last year's accounts
But that is covered by paul's first question

Then also consider the policy of the firm you work for
My firm only ever uses straight line for buildings and goodwill.

Accounting policies will need to be disclosed for the first time

I would never set this challenge to a new employee
This is probably a test to see how you react
I have never had a client get a genuine revaluation on a piece of eqipment that small and then add in a change of depreciation rate
It is a bit like an exam question on comparatively trivial sums

As such have you seen the revaluation report and the fee note from valuer?

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Revaluing plant and machinery

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Replying to Paul Crowley:
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By Paul Crowley
25th Oct 2021 19:05

22nd Oct 2021
Edit
You may have chosen to the wrong route
That kind of reply is likely to reduce the number of helpful replies, particularly as the weekend is upon us.
Your two threads will probably fall down the charts on:
Most recent replies
and
Latest

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Revaluing plant and machinery

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By CJS88
25th Oct 2021 16:08

Did I miss something before?

I think your "client" needs to have a word with his accountant.

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Replying to CJS88:
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By Paul Crowley
03rd Nov 2021 13:26

A thread that got a bit unpleasant was deleted or moderated
OP is a new employee in his new accounting firm per prior thread

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