PracticeConsultingWyevale forced to depreciate assets

Wyevale forced to depreciate assets

Wyevale Garden Centres has had to wipe £821,000 off the value of its fixed assets for 2000 in a restatement forced by the UK's financial reporting watchdog.

The move came about after the Financial Reporting Review Panel disagreed with the Hereford-based company’s directors over the application of the accounting standard FRS 15, which relates to the depreciation of fixed tangible assets.

For short leasehold properties Wyevale, whose finance director is chartered accountant Stephen Murfin, did not show any depreciation in its accounts until the last ten years and for plant and equipment the company was not booking depreciation until the accounting year after the assets were acquired.

‘In the panel’s view, neither of these policies complied with the requirements of FRS 15 as they did not result in depreciation charges throughout the economic lives of the assets,’ a statement from the FRRP said.

The correction has increased the depreciation charge by Pounds 772,000 for leasehold properties and Pounds 99,000 for plant and machinery.

In a statement, Wyvale chairman Brian Arnold said: ‘The comparatives for 2000 have been adjusted to include an additional charge of Pounds 821,000 for depreciation.

‘This would have produced a credit of Pounds 123,000 in respect of taxation if the accounting policy change in respect of deferred tax, referred to below, had not been made. The net effect is a prior year adjustment of Pounds 698,000.

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