Hi Robert,
Sorry to hear about your stock situation.
Stock is valued at either its cost (£15k) or it’s Net Realisable Value (£nil?), whichever is the lower.
If the stock is now completely worthless, you don’t depreciate it away, you write it off in the accounts.
To do this in QF will involve making a journal entry, but before you create the journal, you’ll probably have to create a new expense account and name it, say, Obsolete Stock, number 8103
To do this, you go to the Chart of Accounts and at the top of the page you click on the button “Create New Account”.
Then choose “enter by specific code”
After you’ve created that expense account, then you will use journals to write off your obsolete assets.
Your total stock figure might be mixed in between the following accounts:
1001 Stock
1002 Work in Progress
1003 Finished Goods
but if it is all in code 1001, then you’ll use the journal below to write off the cost of the obsolete stock:
This will increase your expenses by 15k and thus lower your profit by 15k.
It will also reduce the balance in stock code 1001 by 15k, which will remove these assets from your balance sheet. The value of these items will now no longer be in your accounts.
That’s the double entry to do this in QF if you are absolutely sure you can get no proceeds from selling the ‘obsolete’ stock.
If you find before you physically dispose of these components that things change and you can get some cash proceeds from selling them, you can reverse the above. If you need to do that, post on here or send me a private message and I’ll try to help out.
Hope that helps.
Darren
