Help needed re depreciation please!
moz009
Registered Posts: 6 New contributor 🐸
I am trying to find anyone that can help me!
I have a friend who set up a business last year as a Sole Trader. Due to personal circumstances the business has now stopped trading. I am in my Technician year of AAT and am giving them some help with the accounts (or at least trying to!)
As it all happened within the same accounting and tax year, how is depreciation worked out? Or is it totally ignored as the business was trading for less than a year?
Any help or ideas would be much appreciated - thanks!
I have a friend who set up a business last year as a Sole Trader. Due to personal circumstances the business has now stopped trading. I am in my Technician year of AAT and am giving them some help with the accounts (or at least trying to!)
As it all happened within the same accounting and tax year, how is depreciation worked out? Or is it totally ignored as the business was trading for less than a year?
Any help or ideas would be much appreciated - thanks!
0
Comments
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This would be treated in the same way as if you were completing a full first years accounts i.e cost-depreciation=net book value. So for example the business started on 9/4/07, vehicle purchased on 18/4/07 for £3000 (keeping it simple, no HP just a direct cash payment), depreciation is 25% reducing balance, net book value therefore is £2250. The business closes on 1/11/07 but a set of accounts till have to be completed for the trading period so the vehicle is posted as cost with depreciation charge at £750, value £2250 at 1/11/07.
Hope this helps.0 -
Thanks very much - I thought that was right but just needed to check........
Now I just need to find out about the tax implications ie FYA's etc...0
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