Asset register - should adjusted values be included?

Question

I see a statement on the asset register of many parish councils saying that "Once recorded on the asset register, the value of assets must not change from year to year until disposal. Concepts of depreciation and impairment adjustments are not appropriate for local councils".

Can any-one point me to the authority for this statement? Our asset register contains the original cost, an adjustment value and a current adjusted value for insurance purposes? Are these necessary or even allowed?

Answer 1

As far as I am aware the non adjustment of asset value has always been undertaken in PC accounts to avoid the necessity for taxation calculations of any likely profit as a PC is non profit making and any increase in value would be added, on disposal, to the cash holdings of the PC to provide for the good of the community or in reducing the precept requirements of the electorate.

I am sure someone will put me right. ( or check with your internal auditor)

Comments

Thanks Mentorman. I was hoping to gain some evidence to be able to pushback - as any suggestion that our processes or procedures might benefit from improvement is generally met with resistance from some quarters.

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Another alternative of course is to get the HMRC viewpoint on it as they will give you the legal and definitive answer.

Answer 2

I would hazard that this is detailed in the JPAG Practitioners Guide.