Reply to: Deprecation of assets

[northernladuk]

Ive had permi jobs where the employer has just given away old equipment they no longer needed. When you replace a lot of computers you get a lot of old ones you dont want, and now days the recycling charity companies want you to pay them to take them away hahaha.

Health & Safety put the dampers on this the last places I was at. If they give you a duff PC that burns my house down the company could still be held liable for some reason or other so they just canned the whole thing and went for the asset disposal companies.

[Zoiderman]

That sounds like a lot of hassle to me ..

But, as they say, all for a good cause

[escapeUK]

It means you should account for it as a sale, or sell it to yourself for market value - if your permi employer had an old computer you couldn't just sell it and keep the money!

Ive had permi jobs where the employer has just given away old equipment they no longer needed. When you replace a lot of computers you get a lot of old ones you dont want, and now days the recycling charity companies want you to pay them to take them away hahaha.

[Clare@InTouch]

If it is for the kids/schools or a charity some hassle is always worthwhile.

Awwww have we found a soft to you NLUK? I think that's lovely

[northernladuk]

That sounds like a lot of hassle to me ..

If it is for the kids/schools or a charity some hassle is always worthwhile.

[Lumiere]

I'd be tempted to format them, loaded them with the licensed OS and then offer them to a school/kids clubs/nursery and get them to write a £0 invoice as a gift.

That sounds like a lot of hassle to me ..

[Zoiderman]

Same situation but can't be bothered with selling. How do I dispose of it formally, do I need to have pictures of me throwing it into skip ?

Had a couple of laptops bought for around £300 3-5 years ago, doubt there is any value in them now, but I still have them recorded as fixed assets ..

I'd be tempted to format them, loaded them with the licensed OS and then offer them to a school/kids clubs/nursery and get them to write a £0 invoice as a gift.

[Lumiere]

I bought a laptop 4 and a bit years ago that's now depreciated to nothing for accounts purposes. If I were to sell it, probably only £50-£100, do I still need to account for that as a sale? Or does depreciated mean I can just say that it's mine and not the company's and nobody will ever care?

Same situation but can't be bothered with selling. How do I dispose of it formally, do I need to have pictures of me throwing it into skip ?

Had a couple of laptops bought for around £300 3-5 years ago, doubt there is any value in them now, but I still have them recorded as fixed assets ..

[Sausage Surprise]

Trying to work out the CT600 this year, the only asset that I have bought is a laptop for £911, is there a guide that show's what the deprecation should be? Or do I go to the likes of eBay and check the cost of a similar spec second hand laptop?

Depreciation

[JamJarST]

There's no real advantage, but then there's no disadvantage either apart from the depreciation calculation (which takes about 30 seconds). The idea is that assets are capitalised to show their ongoing use to the business, and then depreciated across their useful economic lives.

Thanks Clare, my asset register is so small that I am inclined to just stay in line with the tax valuation myself. Makes no real difference to my balance sheet, either I have a higher net asset balance or a higher retained income.

[Clare@InTouch]

I bought a laptop 4 and a bit years ago that's now depreciated to nothing for accounts purposes. If I were to sell it, probably only £50-£100, do I still need to account for that as a sale? Or does depreciated mean I can just say that it's mine and not the company's and nobody will ever care?

It means you should account for it as a sale, or sell it to yourself for market value - if your permi employer had an old computer you couldn't just sell it and keep the money!

[Clare@InTouch]

Seeing as you can claim CT600 annual investment allowance on most of what we as one man contractors buy, is there any real advantage to have financial accounts that depreciate them? Seem like unnecessary admin for a small business like mine?

There's no real advantage, but then there's no disadvantage either apart from the depreciation calculation (which takes about 30 seconds). The idea is that assets are capitalised to show their ongoing use to the business, and then depreciated across their useful economic lives.

[VectraMan]

I bought a laptop 4 and a bit years ago that's now depreciated to nothing for accounts purposes. If I were to sell it, probably only £50-£100, do I still need to account for that as a sale? Or does depreciated mean I can just say that it's mine and not the company's and nobody will ever care?

[JamJarST]

Absolutely, then you end up with assets worth £1 and no one remembers what they are! This is one of the reasons why we wouldn't even capitalise something under £750 in the first place - it gets written off for tax in year one, and the pace of technology likely means that a computer for that value won't be worth much in a year anyway.

Seeing as you can claim CT600 annual investment allowance on most of what we as one man contractors buy, is there any real advantage to have financial accounts that depreciate them? Seem like unnecessary admin for a small business like mine?

[Clare@InTouch]

So when does the asset's value reach zero on "reducing balance" basis. Surely you end up with an asset that has a value, however small, ad infinitum. I've noticed this with my laptop, can it still have a value come 2020.

Absolutely, then you end up with assets worth £1 and no one remembers what they are! This is one of the reasons why we wouldn't even capitalise something under £750 in the first place - it gets written off for tax in year one, and the pace of technology likely means that a computer for that value won't be worth much in a year anyway.