Day: July 1, 2012

Why stocktaking in Bars is essential

Pubs, Bars, Restaurants & Night Club operators… It’s a cash business!! And where there’s cash there’s a fiddle, you may think you know them all, you might! But what you don’t have is eyes in the back of your head and the time to watch hours of CCTV footage to catch them at it, and that’s just the tip of the iceberg.

Over pouring, cross ringing, recipe knowledge, wastage, breakages, deliveries, poor GP’s are all areas you need to be on top of if you are to make any profit from your hard earned takings, and given today’s economic climate, knowing how your business is performing and at the very least verifying your in house weekly results via an independent auditor makes sense and could be worth tenfold the monthly cost in potential lost profit.

By choosing an independent stocktaking company who specialise in the licensed trade, you can be certain of finding the answers you need to improve and grow your business effectively.

Stocktaking is essential to all businesses, as it enables you to check that your business is performing to its optimum potential. Stocktaking also highlights any problems with stock losses, for instance theft, and determines whether the pricing and ordering of stock is accurate, allowing you to react and make adjustments to improve your margins or re visit your suppliers costs.

On average 28 Pubs close every week and Net closers are 14 Pubs per week http://fullfact.org/factchecks/pub_closures_alcohol_business-3237

In the current climate stocktaking has to be essential.

steve@bicknells.net

 

Should my Assets be Revalued – How are assets revalued? (IAS16)

Most assets decrease in value over time with usage and should be depreciated over their useful economic life. However, some assets increase in value for example Land & Buildings and some Metal based assets.

Under the revaluation model, revaluations should be carried out regularly, so that the carrying amount of an asset does not differ materially from its fair value at the balance sheet date. [IAS 16.31]

If an item is revalued, the entire class of assets to which that asset belongs should be revalued. [IAS 16.36]

Revalued assets are depreciated in the same way as under the cost model.

If property, plant, and equipment is stated at revalued amounts, certain additional disclosures are required: [IAS 16.77]

  • the effective date of the revaluation
  • whether an independent valuer was involved
  • the methods and significant assumptions used in estimating fair values
  • the extent to which fair values were determined directly by reference to observable prices in an active market or recent market transactions on arm’s length terms or were estimated using other valuation techniques

Revaluing Assets will not create a tax charge because:

1. If the asset value increases, the revaluation creates a balance sheet revaluation reserve – Debit Assets, Credit the Revaluation Reserve – in does not create a profit, it increases the Net Worth of the business

2. Revaluing an Asset does not affect Capital Allowances these are based on the Cost of the Asset

3. Revaluing an Asset will not generate a Deferred Tax Charge because although it will affect depreciation, it should be excluded from the Deferred Tax computation as it is excluded from Capital Allowances (IAS 12) – Revaluing the asset increases its carrying value without altering its tax base (since revaluations have no immediate tax consequences)

4. Revaluing an Asset does not create a Capital Gain, Capital Gains will only crystalise if the asset is sold

steve@bicknells.net