I've just taken over a new client and have a copy of their previous accounts and their fixed assest register which is an excel sheet. I notice that the deprecation has been calculated using 25 % reducing balance yet the notes in the accounts say 20% straight line. How do I go forward with this?
Ltd Company or sole trader? Does the fixed asset depreciation on the accounts match up to the excel sheet? I'm guessing that whoever drew up the accounts hasn't changed the standard wording on the notes.
Not sure what you need to do to correct it, will leave that to someone more knowledgeable.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi Georgie
On top of John's questions, I too wonderd if this is just a note issue or if the calcs have been completed wrongly. I di though assume it was a Limited when I read this (dont know why).
Was the correct dissallowable adjustment done in the s/a or CT return?
Where do things stand on the issue of materiality?
Who has placed reliance on the Accounts with the incorrect information? Banks/loan companies/mortgage companies or brokers specifically known to the business owner? Or are we 'just' talking anyone looking at Companies House records?
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Its a limited company and yes, the depreciation matches the excel spreadsheet - its just the notes to the accounts say 20% but the depreciation has been calcultated using 25% reducing balance. Not sure if i can change the notes?
As far as I am aware nobody has relied on the accounts ie. banks/loans etc but I will ask just to make sure. He's a very small company and he told me he had lived at his address for 5 years. There are no loans for the business.
Yes the depr that was calcutated on a reducing balace was added back ,so it all looks mathamatically correct , however the notes to the accounts say depreciation is calculated 20% straight line
As it's only a small amendment I would follow the directions at the bottom. Joanne has raised the question of materiality, which is a good one (as are the others)
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi Georgie
It was just a thought as we didnt know at the top if anyone was relying on such and if it was likely to cause a major issue. Given the massive piles of cack that HMRC seem to accept these days I would be tempted to just do the re-submission. I dont know if HMRC have anyone looking these days for re-submissions as they used to. If they do you might get a request for info to confirm that the tax has been adjusted correctly, but I cant see it somehow. Although someone more experienced on here might be better to answer/help with that one.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Ok Just a thought .... If I send a note to Companies House with the explanation for last years accounts what happens to the years before that as I assume they were done like that as well?
Ok I've had a look and the notes on the accounts for previous years all say depreciation 20% straight line.
The FAR I have been given has calculated the depreciation on 25% reducing balance and its this figure that's in the the accounts. So it's the notes that are not correct. What do I do?
This is something your client should take up with his previous representation, IMO!
Or perhaps you could put a call out to Co House and see what they say (albeit they arent averse to talking a wee bit of rubbish from time to time, so it might well be worth following it up with an email so you have it in black and white should they say ' no action')
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
