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Post Info TOPIC: Holiday Cottage Depreciation
lots to learn


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Holiday Cottage Depreciation
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Morning All

Hope everyone is enjoying the sunny weather.  Apologies for not being on here for a while, life and work just somehow got so busy!

I'm just looking at depreciation for a business with caravan site/ holiday cottages etc.

This is the first year so the cottages and caravan site were valued when the business was bought and I have put them into the balance sheet at valuation.  I am just wondering whether I need to depreciate them at all since the cottages would presumably appreciate in value and then even though I would have to add the depreciation back on there would be no capital allowance available on them. Would it be right to just have a static figure in the balance sheet until such time as they were maybe revalued??

I'd appreciate any thoughts

Thanks

Valerie

 



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Artois


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Hi Valerie

Which standards are you reporting under? 

I did have links for FRS102 and FRS105 but can not seem to find them, will try and dig them out and repost



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Doug

These are only my opinions of how I see things and therefore should not be taken as advice
lots to learn


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Hi Doug

Just a sole trader, really more management accounts and for self assessment purposes

Thanks

Valerie

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Artois


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lots to learn wrote:

Just a sole trader, really more management accounts and for self assessment purposes

 Hi Valerie 

I know you say it is only for internal viewing but you may also need to consider that if your client wishes to sell the business in the future then the first place that the potential buyers will be looking will be at the accounts or your client may wish to expand the business and needs additional finance.

With depreciation my understanding is that you would only depreciate the buildings and not the land, have a look at this link for FRS105 and in particular section 12 which may give you a better idea (or maybe not biggrin)

https://www.frc.org.uk/getattachment/fbe6b585-4b9e-412e-adcd-0567a9ce78cc/FRS-105-FRS-Applicable-to-the-Micro-entities-Regime-(March-2018).pdf 

 



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Doug

These are only my opinions of how I see things and therefore should not be taken as advice
lots to learn


Senior Member

Status: Offline
Posts: 330
Date:
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Thanks Doug

Much Appreciated

Valerie



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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.
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