I have a company client owned 50:50 by 2 brothers.
One brother is in the midst of a divorce.
There are considerable reserves £400k and bank funds £320k on the last balance sheet although I understand trading has taken a downturn this year.
The same brother wishes to have "a year out"
I have been asked if any provision can be made in the accounts for their future intention to purchase a property to enable them to manufacture the plant they current buy in for their projects. This is to safeguard the future of the company long term
The intention I believe is to effectively earmark some of the reserves to protect them from the divorce settlement.
My answer was that other than making their intended plans known via the directors' report there was no scope for "providing" the funds out of reserves.
Any thought please?