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Insolvent company

Insolvent company

In completing accounts for a limited company it is found that the company is insolvent only due to the level of cash injected by the Directors and hence a credit on their loan account. Should there be an entry in the Directors report, or elsewhere in the notes to the accounts, on the lines of their continued support for the company?

Peter Richardson

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By Anonymous
02nd Nov 2006 10:55

You mean solvent?
Presuming you mean solvent rather than insolvent?

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02nd Nov 2006 08:15

Yes..
I usually put such a 'going concern' note in the accounting policies notes.

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02nd Nov 2006 10:28

I agree with Dean
Include an accounting policy under the heading "Basis of Preparation" that the accounts have been prepared on a going concern basis on the grounds that the directors will continue their financial support. No other disclosure is necessary.

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