BTC Part Disposals

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Rachey
Rachey Registered Posts: 589 Epic contributor 🐘
in AAT Level 4 (Level 8 in Scotland)
Hi everyone,

I am struggling to get my head around part disposals. Can anyone put it simply for me please?

Thankyou in advance

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  • Primble
    Primble Registered Posts: 734 Epic contributor 🐘
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    Rachey wrote: »
    Hi everyone,

    I am struggling to get my head around part disposals. Can anyone put it simply for me please?

    Thankyou in advance

    what about it? how it is split between what is sold and what is left? dont you do the percentage of what was sold (and then that percentage of original cost) with deducting that from sales proceeds.
  • Primble
    Primble Registered Posts: 734 Epic contributor 🐘
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    anyway long time no post Rachey. good to see you back in this madhouse
  • Rachey
    Rachey Registered Posts: 589 Epic contributor 🐘
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    Primble wrote: »
    anyway long time no post Rachey. good to see you back in this madhouse

    Thankyou! Been busy at work lately, had a crazy month end, not had one like that in a while.

    With the part disposals, i mean ALL of it!! I don't understand a tad of it. I believe there's a formula?? I did that thing where i've put it to one side and hoped it will go away, unfortunately it doesn't work like that......... :-(

    Pretty confident with everything else on BTC so if anyone needs anything drop me a message on here.

    Cheers
  • Primble
    Primble Registered Posts: 734 Epic contributor 🐘
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    Rachey wrote: »
    Thankyou! Been busy at work lately, had a crazy month end, not had one like that in a while.

    With the part disposals, i mean ALL of it!! I don't understand a tad of it. I believe there's a formula?? I did that thing where i've put it to one side and hoped it will go away, unfortunately it doesn't work like that......... :-(

    Pretty confident with everything else on BTC so if anyone needs anything drop me a message on here.

    Cheers

    allowable cost of whole asset x a/a+b

    where a is proceeds of part sold
    b is market value of remaining part

    dw i did look that up

    do you fancy sitting mine for me as you're confident? i was convinced they were going to reject my id today anyway. lol looks nothing like me but they still let me sit it
  • EAP
    EAP Registered Posts: 63 Regular contributor ⭐
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    Try this – this is how I understand it:
    It’s a way of working out what a ‘fair’ allowable cost would be when you only sell part of an asset. Rather than just working out what proportion of the original you have sold, they make you revalue the remainder and use that to work it out. A simple (if slightly daft) example below:
    Formula: Cost x gross sale proceeds /(sale proceeds + revalued cost of remainder)
    So if you buy a cake for a fiver and you sell a quarter a week later for £2, and you revalue the remainder and find it’s worth £8, then your allowable cost is £5 x£2 /(£2 + £8) = £1, so your gain is £2 (proceeds) - £1 (allowable cost) = £1

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