Depreciation of Band Instruments

Discussion in 'The Rehearsal Room' started by Brastard, Dec 8, 2008.

  1. Brastard

    Brastard New Member

    My community band has received some Lottery funding and has to produce "proper accounts".

    If you do accounts for your band, and show band owned instruments on the Balance Sheet, over what period of time to you write them off? (In other words, what depreciation policy do you use?)
  2. Bones

    Bones Member

    First of all determine what you feel is the effective life of an instrument, say 10 years, to the depreciation will be a 10th of the original purchase price each year.

    When preparing the Profit and loss account, under Overheads, list the calculated figure ie the 10th of the original purchase.

    Under the Balance Sheet, under assets in Year one the value of assets will be the original purchase price and in year 2 it will the original pruchase price less the 10th, and so on.

    Seems to be the simplest way really.
  3. Owen

    Owen Member

    I agree - I have had to undertake a similar exercise in the past and the discussion I had with the accountant was that as long as the approach was reasonable and consistently applied, then it would be fine. Just don't get depressed by the apparent scale of your band losses and be prepared for how on earth you ever present this information at your AGM, should you ever be required to present these accounts in full!
  4. Brastard

    Brastard New Member

    I am a retired FCA with a fair amount of "not for profit" organisation experience, but not in the brass band world.
    We don't want the effort of working out the life of every instrument but are interested in "broad brush" approaches used in the banding movement, if any.
    You describe a "10 years straight line" policy. Do you know if this policy is used by any particular bands?
  5. Farmer Giles

    Farmer Giles Member

    i have seen a few bands use 10 yr, a few used 15 yr and some did 20% rbm.

    depends on how long you think the instruments will last and / or when they will be replaced.

    as said before, as long as it's consistent, and the principle is agreeable to all, there is no problem.
  6. WoodenFlugel

    WoodenFlugel Moderator Staff Member

    We write off a percentage of the value of all our assets including trophys, music, even the chairs we own, not just the instruments.

    Its not worked out on a notion of how long anything will last (AFAIK) but just a flat percentage, which is different for different things. I can't remember what the percentage for the instruments is though....:rolleyes: