Enter A Chattel Mortgage

You generally have the choice of financing plant and equipment with: 

  • A Chattel Mortgage - The GST is claimable upfront.
  • A Hire Purchase - The GST is claimed on each repayment.
  • A Lease - The lease payments will include GST which is claimable in the period the lease payment is made for both accrual and cash reporting. Farm leases are property rental leases and do not involve the acquisition of the underlying land asset.

Each of these options has different recording methods within Agrimaster. Hire Purchase or Lease repayments will simply be transactions coded accordingly with relevant GST on each repayment. The lease residual is the acquisition of plant and equipment and should be coded to Capital Payments. 

Enter A Chattel Mortgage

There are two methods for recording a Chattel Mortgage in Agrimaster:

  1. Using transactions only to reflect the Chattel Mortgage.
  2. Set up a bank account to reflect the Chattel Mortgage. 

Regardless of which recording option is used, it is essential that the full purchase price and trade-in full sale price (if appropriate) are shown in the cashbook and the budget. 

Please Note: The choice as to which option to use is up to you unless your accountant directs you as to which option they would prefer. It is imperative that you consult your accountant before setting up a Chattel Mortgage.

Information Required To Record A Chattel Mortgage

Ensure you have the following documentation to help you record the Chattel Loan: 

  1. The Tax Invoice (which reflects the following information) from the supplier:
    • Name, ABN, invoice number, and date.
    • A full description of purchase of plant including the GST calculation.
    • A full description for the sale of any trade-in of the plant including the GST calculation.
    • Amount to be mortgaged.
  1. A copy of the Chattel Mortgage agreement with the following information:
    • The full amount of loan.
    • Interest amount.
    • Costs including stamp duty and loan application fees.
    • The number of repayments and due dates for each repayment.
    • The amount of each repayment.
Was this article helpful?
0 out of 0 found this helpful
Have more questions? Submit a request