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accountancy treatment of CVA write off

accountancy treatment of CVA write off

A limited company has gone through a CVA and has agreed a 60p in the £1 dividend to creditors. The pre CVA liabilities were £500K and the CVA liability of £300K will be treated as a long term liability until the CVA expires in 5 years time. The question is what do you do with the £200K write down of the liabilities. Does it become a non-distributable reserve "below the line" or does this amout remain as a long term liability as well.

We have hunted through the Companies Act 2006 and the FRSSE but no clear answer emerges, and any help, together with a source or case reference would be much appreciated.


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05th May 2012 12:09



The full liability remains on the books until the CVA has concluded. It could be argued that the liability figure could be adjusted in accordance with the Supervisors annual report.

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05th May 2012 19:57

Terms of the CVA

Why bother writing it off, just creating more work and its also worth checking the terms of the CVA.

What happens if the business makes 'super profits' during the term of the CVA. Will the supervisor request the company to make addition payments to the CVA fund for distribution to the creditors?

I have dealt with a CVA where this was included.

If this were the case then the £200k write off may be too high come the end of the CVA.

I would just leave it in creditors, perhaps in a separate account in the ledger.


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