My client receives money from the Social Services to pay the expenses of disabled people who are unable to manage their own affairs because they are too ill. This usually involves paying the wages of a personal assistant who will come to the house several times a week and help the person. It may be that they also pay for other things but the key thing is that the money they receive from SS is to pay these expenses. How would others show the liability in the accounts? My view is under creditors as a short term liability and disclose it in the notes.
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If your client is holding the money as a trustee (i.e. the money actually belongs to the disabled people), it probably shouldn't be in their own bank account, so not on their balance sheet at all...
(Think about it this way: the money in the bank isn't an asset of your client as it doesn't meet the defininition: they don't control it, have no expectation of future economic benefit from it etc. )
What sort of business?
What sort of business is your client engaged in?
I would suggest that ideally these monies should be paid into a 'client account' or similar and not your client's own account.
There need to be records of expenditure so that your client can demonstrate that the monies were used for the care & benefit of the disabled person and not the client himself.
David
One option would be to show the client account bank balances as an asset in the Balance Sheet and a corresponding (equal) figure in liabilities.
Just for your information I am aware of cases in which carers have been subject to criminal prosecution (essentially for theft) where they have received such monies and allegedly used them for purposes for which they were not authorised (i.e. to meet expenses of the carer rather than those of the disabled person).
So clearly your client does need to keep adequate records to show that the funds received have been used only for permitted purposes (i.e. for appropriate benefit for the individual in respect of whom those funds were received). Your clients need to be 'on the ball' as regards exactly which types of expenditures are permitted in relation to each source of money for each individual.
David