Tangible Fixed Assets Issue

sirglavcelot

Hello,

My Second ARD is due and I've a quick question on calculations.

Fixtures and Fittings cost €6k in first year so I did the following.

Costs
At 1 Oct 2010 = €0
Additions = €6,000
At 31 Sep = €6,000

Depreciation
At 1 Oct 2010 = €0
Charge for this year = €750
At 31 Sep = €750

Net Book Value
At 31 Sep = €5250

But I've additional Fixtures and Fittings in 2nd period of around €2k and I'm wondering how to calculate? If anyone can point me in the right direction that would be great.

Thanks

superb choice of username

You would usually have a fixed asset register. This lists each item with the year it was bought, the cost, the depreciation to date, the net boot values etc. This allows you to calculate the depreciation on each asset.

thomlin

You should maintain a fixed asset register going forward to make it easier to maintain.

However see below

Sept 2011 NBV 5250
Additions 2000
Depreciation 906.25 (assuming you are still using 12.5%)
Sept 2012 NBV 6343.75

You can do this in excel very easily and will look better than just posting the figures to your accounts as you have a backup to what you've calculated going forward.

Send me a PM if you need help with it.

Tom

sirglavcelot

Thanks Tom,

I know I should have a fixed asset register and I intend on setting one up this weekend but I was a little confused about how the second year calculations were to be done but I am using 12.5%. Going by my layout above and your calculations it should be the following, correct?

Costs
At 1 Oct 2011 = €5,250
Additions = €2,000
At 31 Sep 2012 = €7,250

Depreciation
At 1 Oct 2011 = €656.25
Charge for this year = €250
At 31 Sep 2012 = €906.25

Net Book Value
At 31 Sep 2012 = €6,343.75

Thanks

superb choice of username

So, you'll have three main accounts. Assets at cost (always original value), accumulated depreciation (the amount built up), and depreciation charge for the year (you need to decide whether you're using straight line (the same every year), or reducing balance (on net book value).

Cost:
At 1 Oct 2011 = €6,000
Additions = €2,000
At 31 Sep 2012 = €8,000

Accumulated Depreciation:
on new assets = 0
on 2010 assets = 750

Depreciation charge for the year (assuming straight line:
on 2011 assets (2000*12.5% = 250)
+ 2010 assets (6000*12.5% = 750)
Total charge for the year = 1000

Net book value at the end of the year:
Cost (6000+2000) = 8000
Less Accum Depreciation = 750
Less Cost for the year = 1000
= NBV = 6250

---

Else Reducing Balance method:
At 1 Oct 2011 = €6,000
Additions = €2,000
At 31 Sep 2012 = €8,000

Accumulated Depreciation:
on new assets = 0
on 2010 assets = 750

Depreciation charge for the year (for reducing balance):
on 2011 assets (2000*12.5% = 250)
+ 2010 assets ([6000-750 (which is cost less accumulated depreciation)]*12.5% = 656.25)
Total charge for the year = 906.25

Net book value at the end of the year:
Cost (6000+2000) = 8000
Less Accum Depreciation = 750
Less Cost for the year = (250+656.25) = 906.25
= NBV = 6345.75

sirglavcelot wrote: »

Thanks Tom,

I know I should have a fixed asset register and I intend on setting one up this weekend but I was a little confused about how the second year calculations were to be done but I am using 12.5%. Going by my layout above and your calculations it should be the following, correct?

Costs
At 1 Oct 2011 = €5,250
Additions = €2,000
At 31 Sep 2012 = €7,250

Depreciation
At 1 Oct 2011 = €656.25
Charge for this year = €250
At 31 Sep 2012 = €906.25

Net Book Value
At 31 Sep 2012 = €6,343.75

Thanks

thomlin

Hi sirglavcelot,

That looks fine except for the depreciation part should be as such

Depreciation
At 1 Oct 2011 = 750
Charge for this year = 906.25
At 31 Sep 2012 = 1656.25

6000+2000-1656.25 = 6434.75

HTH

Tom

thomlin

superb choice of username pointed out that you would have a higher amount of depreciation depending on your choice of depreciation.

If you are using reducing balance then use the figures I gave you but if you are using straight line then use these figures

Costs
At 1 Oct 2011 = 5,250
Additions = 2,000
At 31 Sep 2012 = 7,250

Depreciation
At 1 Oct 2011 = 750
Charge for this year = 1000
At 31 Sep 2012 = 1750

Net Book Value
At 31 Sep 2012 = 6250

Sorry for the confusion.

Tom

sirglavcelot

Thanks guys,

I think I understand this now. Just one last think is there any source out there where I can download customisable excel accounting templates?

Thanks

smeharg

sirglavcelot wrote: »

Hello,

My Second ARD is due and I've a quick question on calculations.

Fixtures and Fittings cost €6k in first year so I did the following.

Costs
At 1 Oct 2010 = €0
Additions = €6,000
At 31 Sep = €6,000

Depreciation
At 1 Oct 2010 = €0
Charge for this year = €750
At 31 Sep = €750

Net Book Value
At 31 Sep = €5250

But I've additional Fixtures and Fittings in 2nd period of around €2k and I'm wondering how to calculate? If anyone can point me in the right direction that would be great.

Thanks

Are the dates for illustration only? If your accounts are made up to 30 September the latest your ARD can be is 31 March.

Presumably you also mean 3rd annual return (the first being filed without accounts).

sirglavcelot

yes smeharg, the dates are for illustration and you are correct it is the 3rd ARD

sirglavcelot

thomlin wrote: »

superb choice of username pointed out that you would have a higher amount of depreciation depending on your choice of depreciation.

If you are using reducing balance then use the figures I gave you but if you are using straight line then use these figures

Costs
At 1 Oct 2011 = 5,250
Additions = 2,000
At 31 Sep 2012 = 7,250

Depreciation
At 1 Oct 2011 = 750
Charge for this year = 1000
At 31 Sep 2012 = 1750

Net Book Value
At 31 Sep 2012 = 6250

Sorry for the confusion.

Tom

So my Tangible Assets in Balance Sheet will be the new Net Book Value of 6250 for this period?

Thanks

thomlin

Hi Op,

You balance sheet should show the net value of 6250, but the historic costs of 8000 assets and 1750 depreciation will show in the relevant ledgers for them in your accounting system.

However bear in mind any assets you have may be over stated or understated so while they originally cost you 8000 and have a current NBV of 6250 they may only be worth 5000 or could equally be worth 7000.

If this is the case use the revised figure and update your accounts to reflect this.

HTH
Tom

sirglavcelot

thomlin

I wonder if I can bother you with one more issue. I was doing up my rough figures and I've doubled checked my sums. In the section for 'Reconciliation of movements in shareholders' funds' is my figure for 'Closing shareholders' funds' meant to be the same as the figure in the 'Balance Sheet' for 'Shareholders' funds'? I'm out by €100 and I think it has something to do with the Proceeds from issue of shares. Do I have to include the Proceeds from issue of shares of €100 every year in the Reconciliation of movements in shareholders' funds or is that just done in the first year?

Thanks