Accruing capex?! - The Book-keepers Forum (UK)

Shaun UK · Veteran Member

Accruing capex?!

Don Tax · Expert

Hi Shaun,

The books are 'hit' from the date introduced (CR Partner 2 - DR Purch or Cap. Ex) to the partnership - A bank or cash reimbursement might never specifically happen.

The cap-ex was intended to be introduced on the date stated and is entered in the asset register and books at that point. The accountant will apply depreciation and capital allowances as necessary from then. The £1000 seems approximate so provide invoice references.

The goods are also introduced on the relevant dates and be valued along with other stock at the year end.

hope that helps.
Tim

Shaun UK · Veteran Member

Hi Tim. Apologies for the delay but thanks for that. It makes sense.

I only work with a cash book here and so don't have the partner accounts. But I understand how this would work now in an accounts package. The accountant seems to have just worked from whatever was given him over the years and so although I've made improvements to the books he hasn't spoke to me about what else might be useful. I'm not aware of the dialogue that goes on between him and the owner but I would imagine he asks separately about assets introduced and so on, things that the books wouldn't reflect on their own.

Thanks,
Shaun

Don Tax · Expert

Yep, Shaun, a good accountant will see the right questions then ask them. Say a vehicle was sold, then it should almost certainly follow that a new one was bought but if this was with private funds then the entries might not reach the books.

A standard letter is helpful at each year end asking for a list of debtors, creditors, assets bought and sold, cash in hand and various other tailor-made questions.

best regards,
Tim

Shaun UK · Veteran Member

Thanks again. Just a thought on assets that were not sold but had either reached end of useful life or upgraded. I take it questions would be asked on that basis.

My basic understanding of this is that if an asset was repaired then it's revex, but if it was upgraded then it's capex. One of the items this year was a light fitting purchase which replaces the old one. I made a note of this fact on the cash book in excel. I suppose a bookkeeper is expected to check for this sort of thing anyhow. The previous bookkeeper here would have just entered it into fittings and I don't know whether the accountant had any further communication to clarify. I heard in previous years that accruals and pp's were done by the accountant and that debtors and creditor lists were requested, although I'm doing these now automatically.

cheers,
Shaun

Don Tax · Expert

Yes, I imagine the accountant would look at the individual entries grouped as 'fittings' and capitalize them as appropriate. The light, providing it was not an upgrade, would be a renewal and, as you say, Revenue expenditure.

He might train a bookkeeper just to plonk anything under £100 in REPAIRS, and anything over in FITTINGS, but that is just a rule of thumb and will very likely review every transaction before finalising the accounts. It'd be a good idea to have a chat with the accountant to see exactly where he expects your duties to end.

Kind regards,
Tim