J
johntheboard
Guest
I have Tangible & Intangible assets in my business accounts. I did not show the cost of acquisition of these assets as expenses in my P&L but instead have shown a depreciation charge each year in the case of the Tangibles and an amortisation charge in the P&L in the case of the intangibles.
There have been changes in the value of the assets and I wish to write them off. My question is; how should I show this in the P&L in the year of writeoff? My logic is that if I was showing a 20% depreciation charge to the P&L every year for assets where I had never shown the cost of acquisition as an admin expense then when I write them off I should show their residual value as an admin expense in the P&L in year of writeoff. Is this correct?
Example
Computer purchased in year 2004 for €1,000, depreciated straight line over 5 years
P&L admin expenses
2004 Depreciation €200 (residual value €800)
2005 Depreciation €200 (residual value €600)
2006 Depreciation €200 (residual value €400)
2007 Writeoff €400
The Intangible asset is a franchise fee as I started my business as a franchise but last year have gone it alone. The franchise fee therefore has no value anymore so I wish to write it off. It is amortised over 10 years so as I write it off is it correct to show the writeoff as an admin expense in the P&L?
Appreciate any help with this. Thanks
There have been changes in the value of the assets and I wish to write them off. My question is; how should I show this in the P&L in the year of writeoff? My logic is that if I was showing a 20% depreciation charge to the P&L every year for assets where I had never shown the cost of acquisition as an admin expense then when I write them off I should show their residual value as an admin expense in the P&L in year of writeoff. Is this correct?
Example
Computer purchased in year 2004 for €1,000, depreciated straight line over 5 years
P&L admin expenses
2004 Depreciation €200 (residual value €800)
2005 Depreciation €200 (residual value €600)
2006 Depreciation €200 (residual value €400)
2007 Writeoff €400
The Intangible asset is a franchise fee as I started my business as a franchise but last year have gone it alone. The franchise fee therefore has no value anymore so I wish to write it off. It is amortised over 10 years so as I write it off is it correct to show the writeoff as an admin expense in the P&L?
Appreciate any help with this. Thanks