Unable to verify assets

Unable to verify assets

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A client sent me a list of assets which he want's to capitalise and increase his loan account by £5k.

When I asked for invoices or receipts he said that he didn't keep any and when I asked if we could verify these amounts from his individual bank statement he said he couldn't supply the details as mostly cash transactions.(not sure I would pay £800 cash for a computer).

My reaction is not to capitalise these items as he can't prove the purchase but if the assets could be physically identified and valued would that be enough justification to capitalise these items. Would physical v no receipts / proof of purchase be enough to capitalise.

Thanks

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By chrisdxuk
31st Jul 2013 14:49

Letter of Representation issue

Ask the client to give a written itemised undertaking as to the nature and value of the assets. The suggestion that they should be credited to DLA seems to imply an attempt to reduce an overdrawn DLA. Fair enough but should the company go bump an Insolvency Practionier will review the DLA for 24mths and ask him/her to justify the statement. Get something in writing to cover yourself.

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Replying to consultantltd:
By johngroganjga
31st Jul 2013 15:03

DLA is in credit

chrisdxuk wrote:

The suggestion that they should be credited to DLA seems to imply an attempt to reduce an overdrawn DLA.

OP said the entry to introduce the assets would increase the balance on the DLA, so it must already be in credit.

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Replying to consultantltd:
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By Marky
31st Jul 2013 15:24

Thanks for the replies.

I will ask him to send me a covering letter along with his itemised list. It does annoy me when you can't justify £5K of capital assets with any receipts / invoices or bank statement back-up. The DLA is in credit so no attempt to reduce an overdrwan account.

I'll give him the benefit based on the physical evidence but will also keep myself right.

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By chrisdxuk
31st Jul 2013 15:12

DLA in credit

Point taken Johnno Fair kop

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