The tangible fixed assets note reconciles the opening and closing cost and depreciation of the company's physical assets, such as property, machinery and vehicles. Tax Optimiser builds it from the trial balance.
What this note shows
For each class of asset the note shows:
- Cost: at the start of the year, additions, disposals, revaluations, and at the end of the year;
- Depreciation (the cost written off over the asset's useful life): at the start of the year, on disposals, charge for the year, other movements (impairment / revaluation), and at the end of the year;
- Net book value at the end of this year and the end of last year.
Small companies must show these movements for each class of fixed asset (The Small Companies and Groups (Accounts and Directors' Report) Regulations 2008, Schedule 1). The note applies to FRS 102 Section 1A accounts. Depreciation methods and rates go in the accounting policies.
Where the figures come from
The note supports five classes: Plant & Machinery, Fixtures & fittings, Computer equipment, Motor vehicles and Freehold property. A class only appears as a column if the trial balance has balances for it. Each row reads an account named after the class:
| Row | Trial balance account (Motor vehicles as the example) |
|---|---|
| Cost at start of year | Motor vehicles cost b/f |
| Additions | Motor vehicle additions |
| Disposals | Motor vehicles Disposal of assets at cost |
| Revaluations | The class's revaluation account |
| Transfers (in closing cost, no separate row) | The class's transfers account |
| Depreciation at start of year | Motor vehicles depreciation b/f |
| On disposals | Motor vehicles depreciation on assets disposed in the year |
| Charge for the year | Motor vehicles depreciation charge for the year |
| Other movements (impairment / revaluation) | Not read from the trial balance: typed in the note |
The other classes follow the same pattern: "Plant and machinery ...", "Fixtures and fittings ...", "Freehold property ...", and "Equipment ..." for computer equipment. For plant and machinery, fixtures and fittings and motor vehicles, the revaluation account has "depreciation" in its name (for example "Plant and machinery depreciation revaluation"), but it feeds the Revaluations row under Cost.
Accumulated depreciation is a credit balance in the trial balance. The note shows it as a positive figure and deducts it from cost. The total charge for the year should match "Depreciation of tangible fixed assets" in the operating profit note.
Completing the note in Tax Optimiser
Open the period, choose View Accounts, then Notes in the Actions menu on the left. Select Tangible fixed assets. As the editor says, "Cells populated from the trial balance are read-only. Blank cells can be entered manually and are saved with the accounts."
Grey cells come from the trial balance. To change them, correct the trial balance. White cells can be typed in. Use the Other movements (impairment / revaluation) row to record an impairment of a class. The balance sheet is still built from the trial balance, so after typing any figure check that the net book value total agrees to the tangible assets line on the balance sheet.
Click Save changes to save the note and rebuild the accounts preview.
Wording templates
The Additional note for tangible fixed assets section prints under the table and has one template:
- Freehold land not depreciated – "Included in land and buildings is freehold land of £{{LandValue}} which is not depreciated." You'll be asked for
{{LandValue}}.
Type your own wording in the same box for anything else, such as assets held under hire purchase or the basis of a revaluation.
How it appears in the accounts
In the demo accounts the note is note 8. The old motor vehicle traded in during the year shows as a £25,000 disposal at cost and £15,000 depreciation on disposal, and the new vehicle as a £30,000 addition.
Disposals print in brackets and a dash means nil.
Frequently asked questions
Why are disposals shown in brackets in the fixed assets note?
A disposal reduces cost, and the depreciation on the disposed asset reduces accumulated depreciation, so both print as deductions. Any profit or loss on disposal shows in the operating profit note.
How do I show an impairment of tangible fixed assets?
Type the amount in the Other movements (impairment / revaluation) row for the class, and make sure the trial balance reflects it so the balance sheet agrees. The charge itself appears in the operating profit note when it is posted to the Impairment account.
Why doesn't my tangible assets note agree with the balance sheet?
Usually because a figure was typed into a blank cell in the note. Typed cells change the note but not the balance sheet. Post the movement to the trial balance instead, or correct the typed figure.
Where do I put depreciation rates?
In the accounting policies, for example "Plant and machinery: 25% reducing balance". The note shows the amounts.
Where to go next
- Guide to the notes to the accounts – how the Notes screen works
- Previous: Intangible fixed assets note
- Next: Investment property note
- Accounting policies
- Importing a trial balance