Capital expenditure covered by 10% W&T in rental accounts
Monsoon
Registered Posts: 4,071 Beyond epic contributor 🧙♂️
Where a taxpayer with a property portfolio of furnished properties claims 10% wear and tear allowance, where are the capital expenses posted to?
This particular portfolio is large enough to warrant a balance sheet, and so I need to put them somewhere. They don't add to the value of the properies themselves - are they shown separately as an asset on the BS? If so, do they get depreciated?
Is there actual GAAP on this or is it just a judgement call?
Thanks.
This particular portfolio is large enough to warrant a balance sheet, and so I need to put them somewhere. They don't add to the value of the properies themselves - are they shown separately as an asset on the BS? If so, do they get depreciated?
Is there actual GAAP on this or is it just a judgement call?
Thanks.
0
Comments
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Just realised something else.
I'm showing 10% W&T in the P&L, the Cr will presumably be to Drawings, or some misc-y account that can be offset by the Dr to CapEx? Maybe?
God, my noodle is well and truly baked today!0 -
Put capital expenses as additions on the balance sheet - helps to find them again come disposal time. Yes to depreciation but, presuming this is an unincorporated entity, then you can pretty much do what you like!
W&T I just do as an adjustment on the tax comp so don't put it in the P&L at all. If I did then drawings is probably where I would put it.0 -
Thanks Dean.
It's appliances, furniture, carpets, light furnishings, etc, so it's not going to come into play come disposal time, is it? I guess some of it might...
Thanks, I guess had I done it myself frm the off I would do the same as you with W&T; I'm just continuing presentation as per the previous accountant. I might just change it though.
Thanks0
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