VAT on Disposals

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Do you have to split out any VAT included in a part-exchange disposal value (not a vehicle)? <BR>Say an invoice includes the cost of the new asset (not a vehicle) e.g. £20,000, plus VAT £3500, and then takes off the part-exchange value of a disposal at £5000 (says including VAT).<BR>I've only ever seen examples that are vehicles where VAT is non-recoverable anyway.<BR><BR>What would be the journal entries for this disposal and replacement?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    VAT on Disposals

    <BR>Disposal:<BR>Write off the fixed asset itself<BR>Dr disposals (cost)<BR>Cr depn released (depn to date)<BR>Cr profit on disposal (NBV)<BR><BR>Addition:<BR>Dr f/a additions 20,000<BR>Dr input VAT 3,500<BR>Cr bank 18,500 - I assume you paid 5,000 less due to the p/exch<BR>Cr profit on disposal 5,000<BR><BR>I don't think there is any output VAT on the disposal.

Categories

Privacy Policy