Good Morning
This is my first post, so forgive me if I have posted anything incorrectly.
I work for a charity that also runs a social enterprise. We recently purchased an asset that is being depreciated through our charity, and has a HP creditor showing in the charity accounts, but the monthly payments are coming out of the social enterprises bank account.
As the social enterprise uses the asset I need to show the expenditure in the P&L of the social enterprise, which I can do by offseting the monthly payment. However, I also need to show the creditor in the charity being reduced monthly by the same amount as that taken out of the bank account.
I am unsure as to how to do this, and hoped that someone could please advise.
Many thanks in advance, and kind regards.
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Replies (2)
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You seem to be renting the asset to the social enterprise which may be in breach of the HP terms. There may be VAT consequences.
Alternatively, the social enterprise is lending money to the charity to enable it to pay off the HP.
You speak only of movements in money. You are unclear on what these movements represent. Possibly the charity has not thought this through properly.
Agree. It's not obvious from your post why the charity has taken on the HP contract and not the social enterprise that is using (and paying for) the asset.
There may be much more to this than contained in the OP. Is there a local firm of accountants that would help you out pro bono?