Is there a written agreement setting out the status and responsibilities of each party for production and sale of food, faciliating of payments, provision of kitchen facilities?
If I visited this pub on a day your client was operating there would I (based on marketing, menu, receipt provided etc) feel like I was purchasing food from an independent caterer, rather than the pub itself?
If the answer to one or both of these questions is "no" then I would suggest their concerns are not unreasonable.
These sort of questions do make me wonder how many companies selling through platforms are grossly understating turnover (and expenditure).
Reminds me of a post on another forum where somebody was convinced that when selling through ebay what was occurring was that ebay were buying the product from their business and then ebay was selling to the ultimate purchaser.
Thus, assuming FRS 102, the criteria in para 23.10 come into play. (If FRS 105, para 18.9 contain the equivalent criteria.
In short, I would suggest that whilst your client may have invoiced this sale, and even been paid for it, there is no turnover to recognise until the commission is completed.
My answers
Is there a written agreement setting out the status and responsibilities of each party for production and sale of food, faciliating of payments, provision of kitchen facilities?
If I visited this pub on a day your client was operating there would I (based on marketing, menu, receipt provided etc) feel like I was purchasing food from an independent caterer, rather than the pub itself?
If the answer to one or both of these questions is "no" then I would suggest their concerns are not unreasonable.
For the avoidance of any doubt, when you say "pre-trading expenses", are these expenses also pre the company's incorporation?
These sort of questions do make me wonder how many companies selling through platforms are grossly understating turnover (and expenditure).
Reminds me of a post on another forum where somebody was convinced that when selling through ebay what was occurring was that ebay were buying the product from their business and then ebay was selling to the ultimate purchaser.
This is too real for me
Please tell me more about this 'kicking in' of corporation tax
For 1C, consider if para 11.13A of FRS 102 can be utilised removing the need for this measurement difference.
Is this not essentially a sale of goods?
Thus, assuming FRS 102, the criteria in para 23.10 come into play. (If FRS 105, para 18.9 contain the equivalent criteria.
In short, I would suggest that whilst your client may have invoiced this sale, and even been paid for it, there is no turnover to recognise until the commission is completed.
I'm guessing the idea here is that stock and assets would go to the purchaser of the business so there would be none held on deregistration.
Section 630 of CA2006 looks relevant
Does your loan agreement with the company state that interest is charged on the balance outstanding?