Accounts treatment of contribution to repair expenditure

Accounts treatment of contribution to repair...

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A limited company client incurred a large amount of repair expenditure on a property that they are tenants of. It was agreed that they would pay for 100% (say £20,000) but would bill the other tenants in the building for their 50% share (say £10,000). The amounts are material.

Do I show:-

(a) £20k repair expense and £10k revenue, or

(b) just £10k repair expense?

If £10k revenue, just show as part of regular sales or under some other category?

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By Mouse007
07th Oct 2013 13:13

The clue is

"Their share"

This implies to me that their cost is £10,000 and the other £10,000 was processed as agents for the other tenants.

Looking at it another way there is no opportunity or intetion to profit from the work.

I would show the net figure.

 

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By arcon5
07th Oct 2013 13:24

Would the latter £10k possibly be dealt with as a disbursement ?

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Replying to Red Leader:
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By paulhammett
07th Oct 2013 15:29

Just credit . . .

. . . . the £10k invoiced to the other tenants to repairs.

 

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