Three accounts questions

If they are all stationery, then yes.

Probably as an asset.

You depreciate it in the normal way. When you do your capital allowance calculations, you claim the 100% at that stage.

The "normal way" is to depreciate the asset over the estimated life of the asset (less any net realisable value). IT assets are usually depreciated over 2 to 4 years.

The "normal way" is to depreciate the asset over the estimated life of the asset (less any net realisable value). IT assets are usually depreciated over 2 to 4 years.

That is a tax rule not an accounting rule. If you an item of IT equipment that was going to be used for more than one year then your accounts would look misleading if the fixed asset was depreciated totally in the first year.

Yes.

But remember logic. A cow has four legs doesn't mean that everything with four legs is a cow.

The discussion was about a TFT monitor which was an asset but a fixed asset.

Bank accounts are an asset but you don't try to depreciate them (at least not in the accounting sense!).

In message , Fred writes

Dont confuse 'writing down' allowance with 'depreciation' of a fixed asset. A fixed asset will be depreciated in the balance sheet but for tax purposes all of the purchase price is offset against tax. The depreciated value still appears in the balance sheet though.

Yes. But fixed assets and current assets are treated differently.

Not quite. You can claim 100% capital allowance on IT equipment. However the claim for capital allowances on your tax return is entirely separate from what goes in the accounts. The only change to your accounts is the amount you enter as tax due to the Inland Revenue.

In message , Fred writes

In my own accounts I call IT stuff expenses because they can be written off against profits in one year.

However, my accountant calls them capital assets and claims a 100% capital allowance for them. The end result is the same.

Your accountant is right, because although you can claim capital allowances, they are still an asset which should appear on the balance sheet. Your computer doesn't suddenly become worthless just because you can claim lots of capital allowances.

accountants change rules to suit - profit up then PCs are revenue, profit down then they are capital. "expensed equipment" and all that.

it does become worthless once you've bought it though :-)

Phil