What happens if you bought an asset personally before your business began to trade, or before your company's formation date? Here's how to enter that asset in FreeAgent:
You may have bought a capital asset before your business began to trade, or before you incorporated your limited company. For example, you might have had a computer for a number of years. Then you set up your own business and decided to put in the computer as an asset of the business.
Not if the date you bought the asset was before the date you've entered as the company start date in FreeAgent.
This is because a business can't have had any transactions before it existed - and the company start date is the date it began to exist. That's the day it started trading, or for a company, the date of incorporation on the certificate from Companies House.
Enter the asset as an out-of-pocket expense, because you bought it personally, so it's part of what the company can pay you back for.
Date the expense the day you transferred it to the company. That would be on or after your company start date. It's advisable to date it on or after your FreeAgent start date.
And for the value, don't put in the value you bought it for. The value to use is the market value as at the date you transferred it to the company.
Consider how much the asset would have sold for if you'd put it on eBay instead of transferring it to the company.
If the asset is a car, you could use Parker's Used Car Guide or something similar to estimate the market value.
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