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Fixed Assets - computer equipment
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Posts: 7 Forumite
Hi,
Doing my first accounts and not sure how to record my computer which was purchased specifically for business use. It cost £1449 mid-November and company accounts run up to the end of April the following year.
A) Are my fixed assets in year 1 £1449?
Or do I allow for 33% depreciation so assets in yr1 are £970? And £478 in yr2?
C) Or do I divide the full cost of the computer over 3 years and have assets of £483 each year for three years?
Very new to this and thought I had it sorted but after researching assets I more confused than when I started!
Doing my first accounts and not sure how to record my computer which was purchased specifically for business use. It cost £1449 mid-November and company accounts run up to the end of April the following year.
A) Are my fixed assets in year 1 £1449?
Or do I allow for 33% depreciation so assets in yr1 are £970? And £478 in yr2?C) Or do I divide the full cost of the computer over 3 years and have assets of £483 each year for three years?
Very new to this and thought I had it sorted but after researching assets I more confused than when I started!
0
Comments
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And would the same figures apply for Capital Allowance in my first corporation tax?0
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Are you a sole trader/self employed or are you a Ltd Company?0
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Company Limited by Guarantee (social enterprise)0
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....
A) Are my fixed assets in year 1 £1449?
Yes, The £1,449 you spent is a debit to fixed asset cost...... Or do I allow for 33% depreciation so assets in yr1 are £970? And £478 in yr2?
C) Or do I divide the full cost of the computer over 3 years and have assets of £483 each year for three years?
It's nor 'or' it's 'and.
You have an accounting policy that states how you depreciate fixed assets. Three years and 33% a year are the same thing.
You charge £483 to the profit and loss account in year one, and credit fixed asset depreciation.
Your balance sheet should show £1,449 less £483 net £996.
Tax is different.0 -
note carefully the tax computation does not feature in your accounting record. You record depreciation in your accounts, you do not record capital allowancesAnd would the same figures apply for Capital Allowance in my first corporation tax?
how much you claim rather depends on how much tax you are exposed to, there are 2 options:
1. claim the full 1449 as an annual investment allowance. if you tax bill is less than 1449 then claiming the full cost means you lose the excess as you cannot carry if forward
OR
2. don't claim it all in one go, claim your writing down allowance for as long as it takes to recoup the purchase price. If you tax bill is less than 1449 then using WDA may be better if you expect to face a tax bill again in the future.
sounds rather like you are out of your depth if you need advice on tax planning and basic asset bookkeeping for a company?0
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