accountancy treatment of CVA write off

A limited company has gone through a CVA and has agreed a 60p in the £1 dividend to creditors. The pre CVA liabilities were £500K and the CVA liability of £300K will be treated as a long term liability until the CVA expires in 5 years time. The question is what do you do with the £200K write down of the liabilities. Does it become a non-distributable reserve "below the line" or does this amout remain as a long term liability as well.


We have hunted through the Companies Act 2006 and the FRSSE but no clear answer emerges, and any help, together with a source or case reference would be much appreciated.

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Terms of the CVA

Kent accountant |
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