Home For AAT student members AQ 2013 AAT Level 4 (Level 8 in Scotland)
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚


Help needed re depreciation please!

moz009moz009 New MemberRegistered Posts: 6
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!

Comments

  • bigmuggsybigmuggsy Feels At Home Registered Posts: 92
    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.
  • moz009moz009 New Member Registered Posts: 6
    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...
Sign In or Register to comment.