Hi. I've a client who has acquired a new engine, above and beyond a like for like replacement for his Learjet....(Lol) just to confirm - this engine would be deprecated as if it were a asset in its own right, separate from the jet? Would you also consider placing this in the single asset pool? Assuming you had no plan to advise AIA - Also, how many single asset pools can be had? Is there a limit? Thank you
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
No limit to the number of single asset pools and yes, the engines are depreciated seperately to the jet (in their own individual pools) in a similar way to linings being depreciated separate to a kiln.
That you are not replacing like with like does not come into this equation as the new engine is a seperate asset to be depreciated over its useful economic life.
The AIA has no relevance to how you depreciate an asset (Depreciation being an accounting concept and capital allowances being a tax concept).
hope that helps,
Shaun.
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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.
Hi Shaun - thanks. The AIA question was more in line with, there'd be no need for a single pool if you'd be using AIA. Thanks for clarifying, I was imagining all sorts of recalculated depreciation calculations. Thanks
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
when it somes to subsequent capitalisation of assets already owned I use the Mnemonic : ERR
E - Enhances economic benefits (improves the value of an existing asset but is neither a restoration or a replacement)
R - Restores Previously consumed economic Benefits (i.e. replace the lining on a kiln)
R - Replaces a seperately depreciated component of the asset (i.e. replace the engines on a plane)
All the best,
Shaun.
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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.
