Hi All,
I have queries about the disclose of trade debtor with credit balance. The client has a list of trade detors, the total balance of trade debtors is in debit eg £12,000. if the balance of one of trade debtor (eg A)) is in creditor (-£2,000),
- Should i disclose the balance of A as trade creditor in notes to balance sheet ? or i need only to disclose the aggregate balance of trade debtors in the notes;
- If i should disclose the balance of A, please send me the link of requirement, eg FRSSE or FRS102 etc.
Thank you
Andi
Replies (7)
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1. Disclose as a creditor, show debtors £14,000 creditor £2,000
2. Legislation:
see SI 2008/409 and SI 2008/410 in both cases Schedule 1 para 8
available on Legislation.gov.uk
8. Amounts in respect of items representing assets or income may not be set off against amounts in respect of items representing liabilities or expenditure (as the case may be), or vice versa.
What is the reason for the credit? Overpayment, payment in advance,missing sales invoice,error by either debtor or client, other cockup. The answer may have a bearing on where you show it
Bernard Michael has a point - Are you sure there is nothing about this balance that might require you to append a note to the accounts?
Bernard's point is that it might not be a creditor. e.g. if it pays an unrecorded sale it's income. But the solution to such anomalies is a correcting entry in the accounts to remove the anomaly, not a note in the accounts disclosing the anomaly.