Balance Sheet Adjustment | AccountingWEB

Balance Sheet Adjustment

Just going through a Ltd Co set of of accounts and have come across the following problem.

Co A's (development Co) BS show a property @ 88k and a mortgage of 65k.

All the relevant documents show that the property and mortgage do not belong to Co A, but Co B (construction Co).

Of information obtained from the Director, it appears that when the original purchase was made, Co A was the intended owner but funding would only be granted if taken in the name of Co B.

To remove it from the BS would leave Co B as a debtor for 23k. This 23k increase is due to payments made to Co B for renovation etc on the rental property.

No interest charges or rental income had been processed through Co B?

Director was involved with Co B, however this Co went into liquidation several years ago and the IP's were not interested in selling the property due to negative equity.

So do I just leave it as a long term Debtor and thus correct the property side of the BS?

It would be handy to write the debt off, but I can not see that being a possible.

Any thoughts.



There are 5 comments. Login or register to view them.

If Co B no longer exists

taxhound |
taxhound's picture

Wht about the mortgagee?

Old Greying Accountant |
Old Greying Accountant's picture

Ah, the mortgage

puzzel |
puzzel's picture

What did IP do?

Ian Bee |

IP charges

puzzel |
puzzel's picture