An Asset?!

Options
spurschic1@yahoo.com
spurschic1@yahoo.com Registered Posts: 94 Regular contributor ⭐
Hi all,

One of our clients own a box at the O2 arena, how would I class this on the accounts?

Thanks in advance!

Comments

  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    Options
    Nice!

    Owns the box, or owns the rights to use the box for a period of time?
    I don't know the answer either way offhand, but this might help you work it out?
  • spurschic1@yahoo.com
    spurschic1@yahoo.com Registered Posts: 94 Regular contributor ⭐
    Options
    They own it for a period of time if this helps?
  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
    Options
    This would be advertising or entertainment, depending on the usage of the box
  • spurschic1@yahoo.com
    spurschic1@yahoo.com Registered Posts: 94 Regular contributor ⭐
    Options
    If this is an expense rather than an asset would I then post a prepayment as it covers a period in the future?
  • LynWest
    LynWest Registered Posts: 122 Beyond epic contributor 🧙‍♂️
    Options
    If it does not all relate to the financial year of the accounts being produced i would post a prepayment. :)
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
    Options
    LynWest wrote: »
    If it does not all relate to the financial year of the accounts being produced i would post a prepayment. :)

    I don't think you can.

    Certain expenses were you're not guaranteed a return can't be prepaid, we had this problem with marketing brochures, we spent £10k on them right before year end, obviously nearly all still in stock, auditors wouldn't allow us to treat them as an asset or prepay them.
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
    Options
    Different scenario to brochures.

    Presumably they don't own the physical box, just a right to use it for events and that right extends beyond the year in question.

    Is it a lease? How long?
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
    Options
    Different scenario to brochures.

    Could you expand on it please Dean, the principle behind the brochures I get, but knowing where you draw the line?

    Is it because you haven't yet received the service of using the box? They're both a sunk marketing cost with no gauranteed returns.
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
    Options
    Rights to use a corporate box extend over a period of time. More like leasing an office than buying brochures.
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
    Options
    Rights to use a corporate box extend over a period of time. More like leasing an office than buying brochures.

    Ah right, thanks.
Privacy Policy