View Full Version : Value of a 3 year old PC
For accounts purposes is the value of a 3 year old PC £0
If so, can it just be given away (i.e. to family for use at home)?
Paul Norman
1st May 2010, 10:26
I would have thought so. What is your depreciation policy in your accounts? I am guessing the paper profit/loss on disposal will be the important point here.
As a general point, I would say the real value of a 3 year old PC is nothing, so a maximum of 3 year write down period makes sense.
Many large companies, with high volumes of PC's, would regard them as consumable items and charge the whole cost straight to profit and loss. The cost of a new one would just be below the likely threshold for capitalisation.
Computer equipment = 33% on cost
The problem is each individual PC isn't mentioned in my accounts, they all just come under computer equipment.
I've got 6 PC's/laptops ranging in age from 2 years to 8 years.
My accounts for 2008 - 2009 are being prepared at the moment and I would think the total netbook value for September 2009 will be less than £500. (ie. the value of the 2 that are a couple of years old)
I assume this means the ones over 3 years old are wothless (for accounts purposes) and it's OK for the kids to use them at home?
Paul Norman
1st May 2010, 16:39
If that is your depreciation policy then you can remove them from the business with no further implications. Ensure all business stuff is taken off them, especially customer details.
Do not confuse book value with market value. I won't bore you with the details (I know what you are thinking Elaine) but in this case I would imagine the market value will be negligible anyway. Given the restrictions on disposing of computer equipment these days and the data security implications you may find it interesting (unlikely and if you do it suggests you need a hobby/girlfriend) that theoretically the equipment could be carried at less than £0 - the cost involved of disposal.
Steve Cool
1st May 2010, 19:20
An abstract way of considering this conundrum could be.
Suppose the computer "broke" so you threw it away, then some spotty yoof came along and took it out of the bin........without your knowledge.....surely you don't have to account for removals from your dustbin?
Steve
KM-Tiger
1st May 2010, 19:24
... that theoretically the equipment could be carried at less than £0 - the cost involved of disposal.
In other words the disposal cost could/should appear on the Balance Sheet as a liability? Is that what you mean?
In other words the disposal cost could/should appear on the Balance Sheet as a liability? Is that what you mean?
If the equipment is no longer in use, then in theory it could. It is also whereby a company can come to have negative stock - the recoverable value of the stock (damaged, obsolete) is less than the cost of scrapping/dumping it.
Fascinating eh?