This might be cheeky, what do you think?
I'm of the awkward generation who studied under IFRS but trades within the UK GAAP regime and I am unsure if I may be confusing the two here. I have checked the FRSSE (briefly) re the below scenario to no avail.
I have a client purchased a building with some rather nice credit terms; £250k in £500/wk instalments with only £35k down. Repayment is 8.26923077 years.
Of course, to recognise the building and corresponding loan amount and subsequent payments would be straightforward enough. But we're accountants; that's not good enough!
My plan/ploy is the time value of money over that 8 year period.
My question is:
If I effectively "Fair Value" that liability, assuming 3.5% inflation pa for example (which I calculate as £161,768.24 starting point) and subsequently recognise the unwinding of the liability as interest income... Is this then a legitimate deductible finance expense under any head of tax?
If you need reference material see p. 161 Appendix 3 of the FRSSE which details the above scenario as applied to a provision.
Any input whatsoever would be gratefully received.
- Need qualification back due to clients' banks needing my references 135 3
- Was I rude 726 19
- Company overdue but wants to be struck off 156 5
- Dividend payments and shareholdings 141 3
- Corporation tax due date confusion 280 4
- You cannot be Serious!!! 204 1
- Top slicing relief question 221 2
- Valuation of PET on death 95 2
- Incorporation - any tax advantage? 241 6
- Share swap 285 8
- Non Registered trader selling to Malta 80 1
- Online filing 144 5
- Payment for goods received on last day of quarter but refunded the next - what options are open here? 325 13
- New client, prev accountant disappeared 1,685 25
- EC sales list and reverse charge 100 2
- Converting a barn for business use 86 1
- If an invoice is sent and paid does a contract exist 233 9
- Threshold for RTI submission 114 2
- Joint rental income 125 1
- I'm not sure if this is the correct forum but here goes 335 4
- Skandia using wrong address 1,474
- Nil Rate Band Trust - index linked debt by way of charge over property 807
- Any views 726
- International interest certificate 444
- Stamp Duty on share for share exchange 416
- Sale of business 386
- NOVA 279
- IRIS Open Books problem 279
- farming-related R & D tax relief claims 195
- Expenses claim for non employee 184