Sale of lessor companies and similar arrangements: business of leasing plant or machinery: the accounting value of plant or machinery - transactions before 13 November 2008
FA06/Sch10/Para 7 & 7A
This guidance covers transactions where the relevant day is before 13 November 2008. Where the relevant day is on or after 13 November 2008, see BLM80120 or BLM80123
The accounting value of the plant or machinery is:
- the net book value of all plant or machinery assets; plus
- the amount of the net investment in finance leases of all plant or machinery that are shown on the balance sheet.
Plant or machinery has the same meaning as it does in Part 2 of CAA 2001. So an asset is plant or machinery if expenditure on its provision would qualify for plant or machinery allowances.
Finance lease means a lease which under generally accepted accounting practice falls or would fall to be treated as a finance lease or loan in the accounts.
Both figures are calculated at the start of the relevant day. That is as if a balance sheet had been drawn up at the start of the day in accordance with generally accepted accounting practice.
The figure is adjusted if:
- plant or machinery assets are acquired during the relevant day from associated companies, see BLM80125
- plant or machinery assets are included in a lease of land, see BLM80140
- plant or machinery assets were acquired from connected parties at any time, see BLM80155.