Asset under finance

KaelaH
KaelaH Registered Posts: 131 Dedicated contributor 🦉
in General accounting discussion
I am currently preparing accounts for a client of mine who bought a vehicle under finance but only financed part of the cost ie. Vehicle cost £17500 and finance only for £10000
Daft question but, do i include the whole NBV of the van in "Fixed assets held under finance or HP" or just the proportion that is financed?

Comments

  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
    Not sure of your question. The asset is held as a fixed asset, regardless of how it is financed - no?
  • slackda
    slackda Registered Posts: 460 Dedicated contributor 🦉
    Pretty Sure that you Show the Van as full market value i.e cost less deprication.
    So 17500 Less Depn

    and you show the liabilty of future payments
    So £10000.00 Split over Due in 1 Year and 1-5 Years and 5 Years Plus.
  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
    Yes the whole cost is shown as assets under finance irrelevant of the amount of finance, that is until the finance is repaid
  • KaelaH
    KaelaH Registered Posts: 131 Dedicated contributor 🦉
    slackda wrote: »
    Pretty Sure that you Show the Van as full market value i.e cost less deprication.
    So 17500 Less Depn

    and you show the liabilty of future payments
    So £10000.00 Split over Due in 1 Year and 1-5 Years and 5 Years Plus.

    Thanks slackda, I had put full market value in assets list less dep'n and split liability to show less than 1 year and 1-5 years (only 24 month HP) - query was a seperate line in accounts asking to show financed assets.

    Thanks Groundy, that does make sense.

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