-- Edited by Shamus on Thursday 31st of May 2012 06:43:42 PM
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
My manager has asked me to enter a clients bank statements into an excel spread sheet and then to give each row a 'Nominal Code' - another new thing i've learned today.
I found the data entry really easy as am a big fan of excel. Still learning some new formula's but not too bad.
My manager said it is important to split repairs and maintenance costs from assets and I think I have found one today. Trying to get some brownie points I thought i'd ask a quick question to see if somebody on here could help. A restaurant client has installed some new carpets/flooring due to a fire at a cost of £3,000, is this reapirs and maintenance or an asset. I think it could be either, but not sure which is right or why.
I would say that the replacement of the carpet is an asset (Fixtures and Equipment) as it has a fairly long life expectancy and is also a significant cost to the business.
I am sure that others may argue that it culd be a repair or renewal as it was a replacement for what was previoulsy there.
One piece of advice that I would like to give is that whether you give a nominal code or Repairs or Assets, the overall tax position will be the same. I won't explain now as don't won;t to confuse you, but i'd ask your manager to do so when they get some time.
The carpet is an asset to be depreciated seperately to the rest of the establishment as the carpet will have a considerable shorter useful economic life than the floor that it rests upon.
The floor will have been a repair to the building.
For the brownie points ask the manager about the recording of the insurance claim in relation to the fire from which the new carpets were undoubtedly purchased.... Or maybe maybe not score any brownie points if your manager took delivery of a new car shortly after the fire (lol).
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
If it is just the same standard as what was there before then would say it is just a repair to restore to the existing standard.
If it is of higher quality eg good quality oak flooring replacing cheap carpet then it is improving what was there before then there is an argument it should be capitalised as an improvement. As is improving what was originally there.
