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Background

­The purpose of this schedule is to allow the user to identify separately assets which are to be treated as short life assets. This schedule does not allow the user to identify fungible assets.

The Plant and Machinery general pool aggregates all additions and disposals qualifying as Plant or Machinery. Writing Down Allowances are calculated on the balance of the pool. One consequence of this pooling is that under normal circumstances the pool does not give rise to balancing adjustments (either charge or allowance). 

Short Life Assets (SLAs) can be used to overcome this problem. Items qualifying as Plant and Machinery can be separately identified and a de-pooling election made to treat them as SLAs. If the asset is sold before the unrelieved tax written down value is transferred back into the general pool, then a balancing adjustment will arise.

This schedule has been designed to deal with the possibility of pooling all the short life assets acquired in a particular year in separate pools. This applies where the estimated life of all the assets in the class is broadly similar and the inspector is satisfied that this is likely to be less than the SLA period.

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Developing the schedule

This schedule is developed from the Fixed assets schedule using the Develop menu and Short life assets.

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Completing the schedule

Some of the entry cells are described in more detail below:

Description / Period acquired

The user should amend the Period acquired to the end of the accounting period in question, which will enable the system to identify how long the assets have been in use for and make any necessary transfers at the end of the SLA period. The system defaults to a December period end and can be amended where necessary.

Additions

Where additions have been charged to Profit and Loss account, the amount expensed can be entered in the field provided at the foot of the Additions column to reconcile the additions to the analysis of fixed asset movements (see Fixed assets).

FYAs Y/N/D / Rate for FYAs

For periods where FYAs are relevant, the user should use the Y/N/D indicator as to whether additions qualify for FYAs. FYAs may be disclaimed by adjusting the FYA percentage rate or can be fully disclaimed by setting the FYA flag to D. Some guidance is given to this effect at the foot of the schedule.
The rate of FYAs can be amended by entering the appropriate percentage expressed as a decimal.

SLA period (years)

This shows the number of years the asset remains de-pooled before being transferred back to the general pool.  Where the accounting period ends after 1 April 2011, the de-pooling period can be selected for each asset relevant to the date it was acquired.

Transfer to pool

The system will then calculate the allowances available, and will transfer the TWDV of any pooled short life assets into the Plant pool if they remain in use at the end of the SLA period.

Allowances waived

In order to disclaim WDAs, enter the amount disclaimed in the field for Allowances waived. WDAs may also be disclaimed in full by setting the indicator flag in the FYA column to D.

By default any writing down allowances (WDA) waived are apportioned across assets automatically. For FY 2005 files and onwards it is possible to manually allocate WDA waived across individual assets by means of a selector on the schedule. Data entry cells will be displayed for this purpose.

CA2001 s220

Any expenditure restricted under CA2001 s220, which is available for carry forward and inclusion within the next accounting period, will be shown as a memorandum entry towards the foot of the schedule.

'Hybrid' rates of WDA

Where the rate of WDA changes between financial years and a 'hybrid rate' is required to be applied, the software calculates the relevant rate and displays this. Note that this will not display or print in the final version.

A data entry cell is provided to allow for the rate to be overriden if required, and for clarity the rate of WDA applied is also displayed.

Disposals

Where a number of assets are disposed of out of the pool the user should enter the actual proceeds - restricted to cost - in the (Disposals) At Cost column on this schedule.

Where the entire pool has come to an end the original cost should be entered in the (Disposals) At Cost column. The calculation of any balancing adjustments will be incorrect until the Fixed Assets Disposals schedule has been completed. Once the Disposals schedule has been completed, the balancing adjustment for the short life assets pool will be correctly calculated.

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Standard sub-schedules

This schedule has no standard sub-schedules. 

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Carry forward

The system carries forward all identified SLAs when a new period is built. This continues until the earliest of disposal or the end of the SLA period after the accounting period during which the asset was acquired (when the de-pooling election ceases to have effect).

Once the de-pooling election ceases to have an effect, the tax written down value at this date is transferred into the Plant pool. 

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Related errors

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