A new client has asked me to produce his Ltd company's accounts ending in July 2019.
With that, he has also given me a letter from court requesting a witness statement from the accountant about the business' value (he is getting a divorce).
He has around £100,000 in directors loan account for the money he invested in the business. He extended the (rented) premises and bought equipment in the previous years.
However, there is nothing shown in the balance sheet as assets (tangible or intangible or cash).
I have come accross paperwork showing payments towards equipment for the past 3 years and this has not been recorded by previous accountants (or the client did not provide them with the information).
So, if I were to value the business just looking at numbers, the business has a negative value.
However, I know from the client and from experience that the business' market value is around £150,000.
The client has no intention of deceiving the court or his partner. He just doesn't understand anything in the accounts. He hardly speaks any english... And he has no idea of what is going on in the accounts.
The deadline for the witness statement is tomorrow and I don't know what to do. I feel wrong in valuing the business negative while in reality is worth £150,000.