I've got a creditor on my balance sheet that is offering to convert their outstanding balance to equity in my business due to financial stress. I currently have accounted for their invoice in my previous year-end and would need to reverse in this year to reflect the updated view. Presumably, my only tax implication would be the corporation tax due on me this year due to an increase in my profit?
Additionally, I'm assuming that if the creditor were to account for both the invoice and conversion in the same financial year there would be no additional tax implications for them.
If there is any guidance I could be directed to, it would be greatly appreactiated.