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steven_dennis
Dec 25, 2022 4:07 PM UTC
Question

Setup asset that has little to no value

Hello everyone,

 

I am setting up a new company and we have 2 vehicles that are very old.  I would like to put them in as assests however I don't have any of the information regarding what was paid for them or when they were purchased.  How would I go about adding these in correctly?

 

Thanks

 

S

1 reply

Rainflurry
Rainflurry
Dec 26, 2022 1:02 PM UTC

@steven_dennis 

 

You don't enter them at their original cost, you enter them at their current fair market value (FMV).  You should have some documentation to support their FMV because that will impact your basis in the company.  If you determine they have some value, add them by creating a fixed asset account for each vehicle.  Then, create a journal entry and debit the fixed asset account for each vehicle for the FMV and credit the appropriate equity account:  Shareholder Contribution (for S-corp), Owner's Capital (for sole proprietorship), or Partner's Contribution (for partnership).

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