Disposal of fixed assets

KaelaH FMAAT, AAT Licensed Accountant Posts: 131 🎆 🐘 🎆
I am in the process of producing a final set of accounts for a small company that has ceased trading. Over the years all assets have been depreciated on a 10% reducing balance basis therefore there is still quite a lump of asset left.
Due to the nature of the guys business, modern technology has taken over and, as well as the fact that the majority of assets are now 12-15 years old, they have no resale value.
I am in the middle of disposing of the assets in the accounts and am assuming I am right in not calculating a depreciation charge for the year. Is this correct please?


  • PGM
    PGM Registered Posts: 1,954
    As far as I know you treat them as if you've disposed of them in the final year. So no need to depreciate.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
    It depends on the depreciation policy but the standard policy is usually a full year's depn in the year of purchase and none in the year of disposal.

    Any difference in the disposal value and net book value will be Dr/Cr to the P&L account, in your case a debit as loss on disposal.

    This is added back in the tax comp and any balancing allowance or charge in the capital allowances computation will depend on how it's been treated for capital allowances.
  • KaelaH
    KaelaH FMAAT, AAT Licensed Accountant Posts: 131 🎆 🐘 🎆
    Thank you, I was working on the same assumption. I've been looking at this lot for so long I couldn't figure out whether I was right or wrong :)
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