Electricity???

Suejw
Suejw Registered Posts: 39 Epic contributor 🐘
edited June 18 in AAT member discussion
One of my clients runs an equestrian business and has just installed electricity on her yard. Do I capitalise this as it is a lot of money- around £6000 but then I cant really depreciate it so is it revenue??:huh:

Comments

  • T.C.
    T.C. Registered, Tutor Posts: 1,430 Beyond epic contributor 🧙‍♂️
    Capitalise as an improvement to the premises. There would probably not be depreciation though. It would just remain an asset. Repairs to the electrics later though would be revenue expenses.
  • KernowAccountant
    KernowAccountant Registered Posts: 103 Epic contributor 🐘
    T.C. wrote: »
    Capitalise as an improvement to the premises. There would probably not be depreciation though. It would just remain an asset. Repairs to the electrics later though would be revenue expenses.

    Why would there "probably not be depreciation"?
  • T.C.
    T.C. Registered, Tutor Posts: 1,430 Beyond epic contributor 🧙‍♂️
    Well I would treat it like a new installation of a gas boiler, ie capitalise the initial cost, then revenue expenses for any repairs or replacement of the same.

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