Staging and sound kit an events firm owns and hires out
Why staging, lighting and sound kit you also hire to others is still equipment, how to judge its useful life on the road, and how to keep a register of it.
By Achekam · · 5 min read · For Events businesses in South Africa, Nigeria, Kenya
Many events companies own more kit than they need for their own shows. The LED screen, the line-array speakers, the truss and the lighting desk earn money on your events, and between them they go out on hire to other organisers, churches, schools and corporate venues. It is a sensible way to make expensive equipment pay for itself.
It also raises questions at year end. Is equipment you rent to others still a fixed asset, or something else? Over how many years should a speaker cabinet that is loaded onto a truck every weekend be depreciated? And how do you prove to your accountant that the kit on the register still exists when much of it is on someone else's stage?
Hire stock is still property, plant and equipment
ACCA explains that IAS 16 defines property, plant and equipment as tangible items held for use in producing or supplying goods or services, for rental to others or for administrative purposes, that are expected to be used during more than one period.
The words "for rental to others" settle the first question. Kit you hire out is not stock you hold for sale, and it does not become a different kind of asset because a customer uses it rather than your own crew. As long as you expect to use it over more than one period, it belongs in property, plant and equipment, is recorded at cost and is depreciated.
What would change the answer is a decision to sell. Kit you have taken out of service and are clearing out is no longer earning hire income; tell your accountant, because it may need different treatment from that point.
Useful life on the road, not on the shelf
Investopedia explains that an asset's useful life is the period the business expects to use it productively, not necessarily how long the equipment will physically last.
That distinction matters for touring and hire equipment. A speaker cabinet might physically survive for many years, but it may stop being productive much sooner:
- Wear from handling. Kit that is loaded, transported and rigged every week takes knocks that installed equipment never does.
- Technology. Lighting fixtures, video processors and digital consoles are replaced when clients start asking for newer formats, even if the old ones still work.
- Hire demand. If other organisers stop asking for a model, it earns nothing even while it sits in perfect condition.
So base the useful life on how long you expect the kit to keep earning on your jobs and in your hire catalogue, using your own history of when items were retired. That is a judgement to agree with your accountant, and it will often be shorter than the manufacturer's idea of lifespan.
Review lives and parts every year
ACCA also explains that IAS 16 requires useful life and residual value estimates to be reviewed at the end of each reporting period, with significant changes accounted for over the remaining useful life as a change in accounting estimate. ACCA's article on measuring depreciation sets out these rules with worked examples.
For an events firm, the annual review is the moment to ask:
- Has any category of kit worn faster than expected, so that its remaining life should be shortened?
- Has resale value for a model fallen, so that the residual value you assumed is too high?
- Has a model become hard to hire out, which may mean it will be retired early?
The same ACCA guidance says IAS 16 requires each significant part of an asset to be depreciated separately. A video wall is a good example: the panels, the processor and the flight cases may wear out at very different rates. Where a part is significant and its life is clearly different, record it as its own item.
What the register should hold for each item
AccountingTools lists what a fixed asset register typically holds: the asset name, a unique identification number, cost, location, the responsible manager or department, asset class, useful life, salvage value, accumulated impairment, carrying amount, accumulated depreciation and depreciation method. It adds that a register can also hold operational details such as insurance, condition and usage level.
For hire kit, three of those fields carry most of the weight:
- A tag number fixed to the item itself, so a cabinet on a client's stage can be matched to its line in the register.
- Location: the warehouse, a named job or a named hire customer.
- The person responsible: the warehouse manager for kit at base, the crew chief or hire coordinator while it is out.
Condition and usage notes are worth keeping too. A record of hire days and repairs helps when you next review useful lives.
Count the kit once a year, including what is out
AccountingTools recommends an annual physical inventory of fixed assets to check that they exist and to see their condition. For an events business the count has a complication: on any given day some of the kit is out on hire or on a job.
Plan the count for a quieter week. Count everything in the warehouse against the register by tag number. For items that are out, get a signed list from the hire customer or crew chief, and check them off when they come back. Anything that cannot be found, or that comes back beyond repair, needs to be taken off the register so the accounts are not carrying kit that no longer earns anything.
Recording the kit in Achekam
When new equipment is bought, the supplier's invoice is recorded as a bill, line by line with VAT. A bill entered without a purchase order waits for approval before it posts, and it can be paid in full or in parts from a chosen bank account.
The item then goes into Achekam's fixed-asset register. The register lets a business add assets at cost, depreciate them monthly by straight line or reducing balance with a journal each month, and dispose of them with the profit or loss on disposal posted. Two limits to know: the register does not work out tax wear-and-tear, which your accountant calculates separately, and fixed assets are not part of the Business Essentials plan.
Where the year-end review or the count turns up something the register's monthly run does not cover, your accountant can post a manual journal. Achekam refuses a journal that does not balance or is dated in a closed month, and a posted journal can be corrected only by reversing it, so every adjustment stays on the record.
Getting the register ready
Pick one category, such as speakers or lighting fixtures, and bring its register entries up to date with tag numbers, locations and responsible people before the year-end count. Then do the next. For the money customers leave against your kit while they have it, see damage deposits on hired equipment, and for a comparable approach to vehicles that are on the road every day, read depreciating a fleet.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
