We have recently taken on a client who operates a hardware fund for their customers. We are in the process of moving the client from Sage to Xero and completing YE accounts and it would appear that the previous accountant has the hardware fund on the company balance sheet as an asset. In our minds this should surely be a liability? The fund raises credit notes for customers which they can then use to buy hardware off the company.
Is there another way of looking at this which we are missing...?
Thank you for any help you can offer!