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• # 78383
• Mon 16 Jan 2012 09:51 PM

Hi

I have been asked today to urgently prepare the 2010-2011 accounts and Self Assessment for a new client who is a sole trader, and whose accountant is in hospital for the foreseeable future. He was ready to discuss her draft accounts with her when he was taken in, and out of desperation she has had to look for someone else to help her meet the HMRC deadline.  Her paperwork is in excellent order and I have a copy of last year's accounts and self assessment paperwork to use for reference, but obviously I cannot find any information out from her accountant for the reasons already given.

My dilemma is that last year's accounts show a balance sheet with a fixed asset (car) with a negative value.  The 'notes to the accounts' show the vehicle with a nil cost and a negative depreciation value of several thousand pounds.  Last year the depreciation value increased by an additional £1300 from the previous year.

How can an asset have a negative value? As depreciation is not an allowable expense what is the point of calculating it once it has gone to a zero balance?

Am I missing something obvious here? 

• Debbie
  www.beckcottage.com
  
  

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• # 78612
• Sat 21 Jan 2012 05:18 PM

I agree with you on this one!!!!

You cant depreciate something that has no value.

Once something gets to £0.00 you stop depreciating it (Or so im told)

Did the client give you any clues as to what the accountant did it for? I would also be very intrested to know the reasoning behind this.

Sorry I cant be any help :)

• Aaron Lilley
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• # 78614
• Sat 21 Jan 2012 05:54 PM

Aaron

Thanks for your reply.  I haven't been able to get an answer on this but have asked to see a copy of the previous year's (2008-09) accounts if possible to see how it was dealt with in that year.  Haven't got a copy yet though.

I know that I haven't misread them because I even asked my husband to take a look at them to make sure I wasn't going mad! 

Actually, in the meantime and after spending 4 hours on her accounts, she rang to say that her accountant had rung her from hospital to say that he had passed her Self Assessment file on to a colleague to submit it on his behaf, so ironically I haven't got to do this SA for her after all.  However she has promised to give me her 2011-12 accounts to do, and has paid for what I had done so far, so I don't feel too unhappy.

When I get everything back from her in May I'll be able to see how her accountant has managed depreciation in the 2010-11 accounts.

I'll update you if I hear anything. 

• Debbie
  www.beckcottage.com
  
  

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