Thank you for your reply. My client only had the car for three weeks so is it necessary to show any depreciation? If so how do I do that for just three weeks?
yeah, just remember that a car depreciates most within it's first year. The depreciation will be the difference between the cost of the car and the amount given to the client by the insurance company.
The views expressed in this post are my own personal (HRA protected) views, and are not representative of any organisation I have any involvement with.
No need to calculate depreciation in the year of disposal as it does not have any effect.
As Kris and CBS say its the difference between the cost three weeks ago and the realiseable value ie what the insurance co paid which determines the profit/ loss on the sale of the asset in this case
The views expressed in this post are my own personal (HRA protected) views, and are not representative of any organisation I have any involvement with.
I'm a tad confused. I have px of a car that was cost £1400 dep charge £350 then px for £600
I understand that I need to get the fixed asset to nil and looking at the VT guide I have to put in -450 (where?) but that seems wrong. The guide also says I have to do a final depreciation charge to balance it back to zero
So would it be cr dep-charge 450 cr disposals £600 dr expenses - depreciation £1050? I think that's where I'm getting confused as I thought you didn't depreciate in the year something is sold.
Looking at the example from CBS I end up with a difference of £450 and debit disposals once (£600?) and credit it twice but I'm probably not reading it right
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
