How should I account for an investment property where the Ltd company is the beneficial owner but the mortgage is the Directors personal liability?
The income and expenses will be on the company P&L and therefore it fits the recognition of a fixed asset but there is no corresponding liability (mortgage) and no cash has changed hands.
Its a micro entity and reporting under FRS105.
My thoughts are to;
- recognise the fixed asset at cost to the company which is nil; or
- recognise at the cost of purchase by the director and include some kind of reserves adjustment