accounting for stolen laptop

[ewakursafletcher]

A laptop was stolen from our company, was new and has been just entered in assets register - no depriciation deducted .
Could you please help with accounting for this loss in Sage?
Thanks,

[brucedenney]

I would seek the advice of your accountant.

This is a specialist question that is not really suitable to be answered on a forum.

However, in my unqualified opinion.

From a real life perspective, the asset is gone so you can't have it shown
From a tax perspective, you can't write it off as a loss in the P&L but you can continue to depreciate it.

So in the balance sheet to need to leave the asset in place so you can depreciate it and you need to remove it because it is gone. My thought would be to leave it as an asset and continue to depreciate it, but also put an entry in for the loss of the asset. The value of the loss of the asset loss would need to be reduce as the value of the lost asset was also depreciated.

Add in differing accounting policies and the different rules around Partnerships, Ltd cos and so on and it is complicated to say the least, hence the advice to get proper advice.

[moon]

The accounting treatment for this laptop is the same as if you have sold it, however, the sales price must be $000.00
As there is not accumulated depreciation, so the following double entry solely will serve the purpose.

Debit: Loss on theft of asset $xxxx (Income Statement or statement of financial performance)
Credit: Asset $xxxx (Balance Sheet or statement of financial position)

Yasir
ACCA qualified

[brucedenney]

Interesting, but it seems open to fraud.

[moon]

How its open to fraud?

[brucedenney]

A person wishing to commit fraud could buy lots of assets for the business that they sell down the pub for cash and then write off the asset in the business.

[moon]

See, the accounting treatment is to write off the asset because it will show the real picture at the year end in financial statements the asset is not there. If we continue to depreciate it, it is not correct accounting treatment.
However, about the fraud; there are internal controls to prevent & detect fraud. It is on the part of administration, internal audit, audit committee, owner etc. to set effective internal controls not only to prevent & detect fraud but to avoid errors and run company with best practices decided by them in the light of governing rules & laws by providing the control environment, control activities & procedure manuals & set procedures for each and every single person and each single movement & transaction in organisation; and then strictly follow them unless it is practically seen that there is need of any change in practice manuals.
I hope it helps, its the extract of 8 years of my study & practice.
Need anything further, I'll be here for you.