We have taken on a new Ltd Co (property rental portfolio) and since FRS was introduced, was put on FRS 105 by previous Accountant (bad choice in my opinion!).
Anyway, to make that worse....this Accountant has not even depreciated the properties since the transition to FRS 105 either! Neither have they reversed out the revaluation reserve. So, two major errors here. We are talking multi-million pound figures too.
So...after reversing out the revaluations, and applying depreciation from the time the properties were first acquired, the balance shet could be going from £2.9m to NEGATIVE £200k.
Major! My question is, how would you sort this? Ideally I would like to "reverse" the idea of the client moving to 105 and pretend they chose 102, and prepare 5 annual accounts since on this basis. Is this allowed?
Instead would it be a large PYA in this next set, including a transition from 105 to 102? Would that help the situation anyway?
Any advice welcomed :)