Which Account/Analysis Column? - The Book-keepers Forum (UK)

Shaun UK · Veteran Member

Which Account/Analysis Column?

Lisa Jo · Senior Member

Depends.. What type of business is it?

Rhianrach · Expert

How do they relate to your business? Do they have any effect at all on trade? Why has the plaque been put up? basically Why is it an expense to the company ? apart from obviously being paid from company funds.

If it has been done with respect to an ex (meaning dead) employee or customer then there is a chance of getting away with a charity expense otherwise it just windows or new kitchens (see other posts) smile

-- Edited by Rhianrach on Friday 21st of May 2010 01:50:32 PM

Shaun UK · Veteran Member

Hi Lisa. Its a care home, so the garden is part of the service for the residents.

Shamus · Forum Moderator & Expert

Was this a charitable donation in the form of an item rather than money? If not, what was the business case for the plaque?

Money to local charities rather than national charities is allowable as it is implied in the giving that such is generating goodwill for the benefit of the company with the local community.

If there is no business case then include in the books as a payment with full description as to what the item is.

If this is not a charitable donation to a registered local charity then this should not be a deduction for tax purposes so after calculating the Profit or loss for the year this needs to be added back into the tax calculation.

Shaun.

Shaun UK · Veteran Member

Thanks Steve and Shaun for those extra thoughts. I'm not totally sure what the plaque was for. I don't think it would be either an ex employee or resident or a donation. I don't have contact with the owner this fortnight and can't get to see the plaque itself at the moment to work out what it's for! But, I have a good guess that it's a 25th anniversary thing. There's been a lot of other stuff through the books at a similar time re stationery, flags etc etc for the anniversary.

So if it is this, 'effect on trade'? I guess some of the expenditure could come under advertising/marketing, i.e the flags. If the plaque is highly visible and supposedly promoting the longevity of the company, I suppose that too could be advertising? (Stationery and booklets speaks for itself.)

Shamus · Forum Moderator & Expert

Hi Shaun,

from the description that you just gave I concur that it does sound like advertising so you would be able to expense it and it will be tax deductible.

Phew, makes it a lot easier if that's the case.

Shaun. (alternate version).

Wella · Expert

Just another thought.

If it is a plaque for an ex guest/ patient, could it not be a cost of sale type transaction, if say for example one the services the care home provides as part of an all in one package, is a memorial to residents that die in care?

Just me thinking laterally

Bill

Shamus · Forum Moderator & Expert

Hi Bill,

Seems like anti advertising.

Imagine driving up to that and seeing lines and lines of plaques! From the homes perspective they might think that it shows how many guests that they've had and how they care about their guests.

From a potential residents viewpoint it must seem like the train ride into a concentration camp and must surely put people off going to that home.

Just reminded me of the nursing home by me where it is directly opposite the funeral home so every morning when they open their curtains what's the first thing that the residents see!

Then again, I suppose that it reduces the carbon footprint associated with collections!!!

What a morbid thread for a beautiful sunny day.

Shaun UK · Veteran Member

Not just a typed lol moment, but a true laugh out loud moment the instant I realised where your comment was going Shaun. "Seems like anti advertising"!!

So yes I guess it can go as advertising which makes it a nice easy decision. However! For my understanding if it wasn't fitting for advertising, yet didn't really have a purpose in providing a service (like a cooker, or desk in a residents room), then it's as good as a picture on a wall. So what account and could it be expensed then?

And for tax we're back to the, it doesn't really help bring in revenue for rev exp matching purposes and as for cap exp, well, it's not really a fixture/fitting is it; and the cost of it is low, so as far as materiality is concerned it would probably be a candidate for immediate expensing anyway!

Thoughts?!

Cheers Again. And yes what a wonderful sunny day it is whilst we're cooped up in our respective offices. Mine is like a swedish sauna at the moment!

RobH · Expert

One off, small value item, difficult to analyse... could be heading for 'sundry expenses'?

Rob

Marky65 · Guru

'sundry expenses' or thereabouts

Mark

RobH · Expert

Another convert!!!

Shamus · Forum Moderator & Expert

Hi Rob,

Of course we purists see it as another one fallen by the wayside!

Come the glorious day we're going to start gathering you all up and make you do calculations to 16 decimal places.

Of course, Actuaries (the provisional wing of Accountants) still consider that to be there or there abouts!!!.

RobH · Expert

I bet you make me use an abacus too!

Going to mow the office lawns now (makes the place sound big but just abit of grass at the front and the back!)

catch you later,

Rob

Shamus · Forum Moderator & Expert

Have fun, talk later,

Shaun.

Wella · Expert

Shamus wrote:

.........Come the glorious day we're going to start gathering you all up and make you do calculations to 16 decimal places.

Lets break the world record for the number of decimal places calculated in Pi..... only joking.

When I said I was thinking laterally, I didn't say I was thinking clearly but I see what you mean. We have to admit our mistakes, at least they can bury theirs.

Shamus · Forum Moderator & Expert

Hi Bill,

I'm pretty sure that your behind the barricades at my end of the argument over there or thereabouts.

Sixteen decimal places is the precision for calculation routines in banking but saying as on occasion payments systems are processing around £450 billion per day it still ends up as there or there abouts.

love the sentence about burying their mistakes... Actually where mistakes are involved it's definitely better to cremate!

Rhianrach · Expert

RobH wrote:

One off, small value item, difficult to analyse... could be heading for 'sundry expenses'?

Rob

Aaaaah my favourite account. smile

RobH · Expert

That and drawings, eh Steve??!

Rhianrach · Expert

Yeah drawings is good, especially for your Ann Summers stuff, sorry tools.

Shaun UK · Veteran Member

Not only do I get answers, but humourous reading too!!

Wella · Expert

Shamus wrote:

Hi Bill,

I'm pretty sure that your behind the barricades at my end of the argument over there or thereabouts.

Definately with you there.
I don't even like seeing rounded amounts on the P&L or balance sheets and what's with column headings that start £0000?! Isn't that "there or there abouts"?

Steve, don't forget the batteries for your Ann Summers tools

Shamus · Forum Moderator & Expert

Morning Bill

between the accounts rounded to 000's and the impossibility of correct calculation of really large number even with sixteen decimal places and also the NI books that give figures close to your salary figure rather than advocating the exact percentage method I fear that our barricades may be about to be overrun by the non purists.

Abacuses at the ready my friend, we'll go down fighting... I would have said calculators at the ready but you can do an awful lot more damage with an Abacus than a calculator... Then again (thinks Enron, Worldcom and Polly Peck!!!), maybe one can do a lot of damage with a calculator as well.