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  1. #11

    Fingers like lightning


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    Quote Originally Posted by Jcochr View Post
    I was thinking that I will keep the company open until the asset has depreciated but that it would be better if the depreciation followed a straight line approach. If I write-off the asset this year then I have to take a reduction in profits and then I have to pay back dividends. If I wait till next year and the asset depreciates then I can avoid this. IMO
    Bit confused by this comment.

    If disposing it and having a loss on disposal would make your company insolvent, then presumably if you'd had a more aggressive depreciation policy it would have been the same?

    Regardless, it still seems to me that assuming this is just standard contractor fixed assets (ie a laptop and maybe a mobile), then presumably the second hand value is hundreds rather than thousands...in which case it should be fairly trivial in the grand scheme of things and not something to get too worked up about.

  2. #12

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    Yes but this year the accountant is saying the following: Please note that due to the loss of the disposal you will have overpaid your dividends as there is not enough profit in the company to pay these. There is now a director loan that will need to be paid back.


    Quote Originally Posted by Darren at DynamoAccounts View Post
    Any balancing charges are calculated on the tax WDV (Written down value) which is shown on the tax computations rather than the accounts. The value in the accounts is not the same as the tax WDV. In essence, the tax WDV will be únil in any case as the assets are likely to have been fully claimed in the first year of purchase.
    Last edited by Jcochr; 2nd March 2017 at 11:38.

  3. #13

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    Quote Originally Posted by Jcochr View Post
    Yes but this year the accountant is saying the following: Please note that due to the loss of the disposal you will have overpaid your dividends as there is not enough profit in the company to pay these. There is now a director loan of ú2,152.42 that will need to be paid back.
    Any chance you can quote first and THEN write your response. It's very hard to understand the context with the quote after.
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    Contractor Among Contractors


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    Some guys put comments in their code before the line of code they are referencing, so you know what is coming next.
    Quote Originally Posted by northernladuk View Post
    Any chance you can quote first and THEN write your response. It's very hard to understand the context with the quote after.
    Others put it after the code to explain what they just did. I think that's a stupid way to go, but I'm able to work with it.

  5. #15

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    Quote Originally Posted by WordIsBond View Post
    Some guys put comments in their code before the line of code they are referencing, so you know what is coming next.

    Others put it after the code to explain what they just did. I think that's a stupid way to go, but I'm able to work with it.
    Typical coders...so one dimensional.
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  6. #16

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    Default dividends and director loan connection to write-off of assets

    Yes but this year the accountant is saying the following: Please note that due to the loss of the disposal you will have overpaid your dividends as there is not enough profit in the company to pay these. There is now a director loan that will need to be paid back.

    Quote Originally Posted by Darren at DynamoAccounts View Post
    Any balancing charges are calculated on the tax WDV (Written down value) which is shown on the tax computations rather than the accounts. The value in the accounts is not the same as the tax WDV. In essence, the tax WDV will be únil in any case as the assets are likely to have been fully claimed in the first year of purchase.

  7. #17

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    Default straight line is aggressive depreciation?

    Quote Originally Posted by Maslins View Post
    Bit confused by this comment.

    If disposing it and having a loss on disposal would make your company insolvent, then presumably if you'd had a more aggressive depreciation policy it would have been the same?

    Regardless, it still seems to me that assuming this is just standard contractor fixed assets (ie a laptop and maybe a mobile), then presumably the second hand value is hundreds rather than thousands...in which case it should be fairly trivial in the grand scheme of things and not something to get too worked up about.
    Is that a question? The accountant leaves the assets on the books for longer for little benefit. Straight line is more predictable with less admin at the end. I don't think the issue is all that complicated but seems to be very difficult to communicate and this accountant is being deliberately unable to understand simple requests. If you don't depreciate in a straight line way then you get left with assets forever on the books. It is probably helpful for accountants who want to keep clients but not good for Directors.

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    I'm not saying straight line is aggressive, but it seems your primary concern is that your assets are still showing a higher NBV when you want it to be (closer to) únil. A more aggressive depreciation policy would be one that reduced the NBV quicker.

    I don't anticipate for one second that the accountant is using reducing balance depreciation policy as a means of keeping you as a client longer. Clients can leave/close regardless of whether assets have a NBV or not.

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