Capital expenditure covered by 10% W&T in rental accounts

Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
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?



  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
    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! :lol:
  • deanshepherd
    deanshepherd Registered Posts: 1,809
    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.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
    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.

    Thanks :)
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