As part of the work we do we purchase tools and equipment which we use to carry out our jobs. Some of these tools are things such as ladders and standard tools and don’t have much value, others are items such as phones and laptops. What nominal should I use to enter these items and should I account for the smaller value items such as ladders/drills etc as assets?
Thanks
Bigfoot
There’s quite a few topics on this and the general answer is it varies between business types and accountants but usually smaller purchases up to a certain value (usually £2-500 or so) could all go under general purchases regardless and larger purchases over this threshold could be assets, but this isn’t a set rule so you could add smaller items as assets if you want to keep track of depreciation or just add everything as general purchases if you don’t.
I personally do the latter as I don’t resell any of my tools as they are thoroughly used so the depreciation is of little concern as they are generally in a skip at the end of their life or I keep them past the end of the depreciation to zero period so keeping them as assets is not worth the hassle.