depreciation query

deborahcarpenter

Good Morning all,

My neighbours has asked me to take a quick look at his accounts for him. He has just parted company with his previous accountant for various reasons.
He is a Limited Company and rents a building from a private landlord to whom he pays £1500 per month. The question i have is he took out a loan to have some work done to the building but the previous accountant has included the costs of the loan (repairs) in the fixed assets under leasehold depreciation and depreciated it by 25%. As i remember this is not right as he only rents the bulding from the leaseholder? Also on his return to Companies house this depreciation cost has not been included, the only depreciation figure shown is that for the equipment he has bought (which is corect) Hence i think his tax return was incorrect last year.
And to top that the balance sheet is incorrect as the wrong figures have been entered for cash at bank and no figure has been included for the loan in the liabilities section. This makes this years balance sheet impossible to balance. Any ideas what i should do? or am i completely wrong in my assumptions?!!
Any help greatly appreciated.

deanshepherd

If it was capital expenditure then leasehold improvements may well have been the correct place to put it.