I am the finance director of a small local charity with annual turnover of about £17k. We are due to file our first year's financial report to Companies House. When the company incorporated, it received the tools and equipment from the pre-incorporation charity (our charity is not a registered charity). My question is: can I show the value of this equipment in the balance sheet, with depreciation? If so, what is the balancing figure for this value, given that the only figures that can be shown in the company equivalent of the Capital Account is share capital and profit/loss?
System of Law: England-and-Wales
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Thank you for the question.
Re. Accounting treatment of equipment
Yes, you would show this as assets on the balance sheet at 'deemed' market value at the time of incorporation (a reasonably estimated value will probably do), with depreciation.
The corresponding credit entry would be either part of capital or reserve (or loan if needs paying to previous party) when the assets brought in.
I trust the above helps.
Tax Consultant & Freelance Lecturer over 9 years experience