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Removing FA - Restating Accounts

I have to remove a building from a new client's accounts as it is not a company asset (checked with land registry over ownership and with prev a/c).  It has been depreciated and there since (a sloppily done) incorporation.

If I simply journal it out and balance to DLA which works I am left with a small amount owing to directors on DCA which I will have to account for under S455 CA 2010.

I also occured to me though that if I were to correctly restore the accounts to be as if it had never been there I would need to add back all depreciation to the P&L which would leave me with a large loan to the directors. and a large S455 bill.

If the accounts had been done properly they would have declared dividends to cover in earlier years and my first suggestion appears to leave it open for HMRC to come in and ask what the money taken out in the past represents and how was it taxed as no divends were decared or reported on SA.

Clarity anyone???

Thanks

M

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are you sure

they could be holding it in trust for the company - you havent mentioned the client

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i am sure

Hi Carnmores

 

Yes I'm sure - I have been through this with them. They are adamant that the building (which was purchased by them prior to incorporation) was always intended to remain as their personal property. Apparently the queried it with the accountant at the time but nothing was done.

 

The accountant who dealt with it has moved on (a franchise acountant) but the guy there now says there is nothing to indicate it should be on the balance sheet specifically.

 

M

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ok thats that the now moving on

you will have to take th FA out agreed you will probably also need to resate the comparatives and possibly redo last years accounts for resubmission under ixbrl

yes you have to undie the journal tho why it was depreciated i am not sure unless it was either losing value as a lease or simply down to property vales - automatic depn of L&B has always struck me as slightly ridiculuous.

you seem to mixing up amounts owed by  and owing to the  directors which one is it?

if the directors are out of pocket try and claim against the old accountants tho beware there must be a reason why they would put a personal property into a limited company, i am usuallu suspicious of peoplke who are 'adamant' about things!

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