Adding assets to a job

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Overview

One of the first issues to deal with when commencing a Job is recording the collection of monies previously held in the possession of a Company.

We will first look at how the opening balances are established for funds existing at the time of appointment.

Creating and Opening Bank Account Balances at Appointment

At the time of the appointment of a Liquidator, a company may have Cash at Bank and Cash on hand in its possession.  The SOA value, ERV and Amount Realised for all assets (including cash) must be tracked for the purpose of preparing abstracts of receipts and payments.

To record cash assets “realised” by the Liquidator, use the pre-existing asset accounts (Cash at Bank, Cash on Hand and if necessary, Investments (Cash)).  Adding a new Asset for Cash at bank and Cash on hand will automatically generate opening balance journals in the financial accounts.  Once you have entered the opening cash balances you may update the details of the Cash at bank account (using this as your default bank account). For more information in this regard, please see the later module “Bank Accounts”.

You may also transfer balances from the Cash on hand account to Cash at bank or set up a new bank account.

1.    Click on Financials > Assets tab.

Add Asset 1.png

2.    Click Add Asset .

The Asset Capture dialog appears.

3.    Select Cash at Bank at Appointment.

4.    Enter £10,000 for the SoA Value (the value reported on the SoA) and £10,000 as the Actual Value.

Add Asset 2.png

5.    Click [Save and Exit].

6.    Repeat the above process to enter Cash on Hand.

7.    Enter £100 as the Advised Value and £100 as the Actual Value.

8.    Click [Save and Exit].

9.    To review the transactions created, open the account register by clicking Financials > Accounts, and [double-click] on Cash at Bank.

Add Asset 3.png

The Cash at Bank account register appears.

Add Asset 4.png

Adding Accounts Receivable (Pre Appointment)

1.    Click Financials > Assets tab.

2.    Click Add Asset.

3.    From the Asset Type drop-down options, select Accounts Receivable (Pre-Appointment).  The Asset Capture Form appears.

4.    Enter the Asset Details as follows:

Field

Value

Debtor

Pilchards Products

Invoice No

123

Date of Debt

16 August 2005

Total amount owing

£15,000

Actual ERV (high)

£15,000

Actual ERV (low)

£15,000

Note

The Date of Debt should be before the Job’s start date otherwise the transaction may appear on the VAT return (using the accrual tax method).  If the Include as VAT Input tax checkbox is ticked, and the debt is collected, the VAT included in this entry will be included in the VAT return.  Usually, VAT collected from pre-appointment debtors is not remitted to HM Revenue and Customs, so leave this checkbox blank.

5.    Save the Asset by clicking [Save and Exit].

Adding assets subject to lease/chattel mortgage

When assets are subject to a lease or mortgage and an external administrator is appointed, it is necessary to record and value those assets and weigh up the value of the assets against the liability attached to those assets.

Note

The input of assets secured under fixed and/or floating charges is dealt with in the secured creditors section of this manual.  See Entering Secured Creditors

In the following exercise we will add assets subject to a lease and in a later module we will pay out and disclaim the assets.

1.    Click on the Financials > Assets tab.

2.    Click Add Asset.

3.    From the Asset Class drop-down options, select Asset Subject to Lease/Chattel Mortgage.  The Asset Capture Form appears.

Sec Asset 1.png

4.    The asset holding account will default to Assets Subject to Lease/Chattel Mortgage.

5.    Enter the following details.

Sec Asset 2.png

6.    Click Add as shown above.  Enter the asset and details as shown below.

Sec Asset 3.png

7.    Click [Save and Exit].

8.    Add another asset with the following details by repeating the previous steps.

Sec Asset 4.png

9.    Exit back to the Asset Register and review the summary details.

Sec Asset 6.png

10.    After reviewing the leased assets, exit this window.

Adding "Land and Property"

For the purpose of recording information appearing on the SoA, the system records the company’s interest in land and property.

1.    Click on the Financials > Assets tab.

2.    Click Add Asset.

From the Asset Type drop-down options, select Interests in Land.

3.    The Asset Capture Form appears. The asset holding account will default to “Freehold Land and Property”.

4.    Enter the Asset details as shown in the screen shot below.

Land 1.png

5.    Click [Save and Exit].

Adding "Plant and Equipment"

Plant and Equipment assets use the standard asset entry form.

1.    Click on the Financials > Assets tab.

2.    Click Add Asset. The Asset Capture dialog appears.

3.    Select an Asset Class from the drop-down list. In this example select Plant and Machinery.

4.    Select the Asset Holding Account. This will default to Plant and Machinery.

The Asset Capture window appears.

5.    Enter the following information:

Field

Value

Date acquired

13 June 2010

Description

Back-up generator

SoA Value

£15,000

SoA ERV

£15,000

Actual ERV (High)

£15,000

Actual ERV (Low)

£12,000

First Charge

No charge in this example

Amount owing

No amount owing in this example

Your screen should look like the one below.

Plant 1.png

6.    Click [Save and Exit].

Adding "Stock / Inventory"

1.    Click on the Financials > Assets tab.

2.    Click Add Asset.  The Asset Capture dialog appears.

3.    Select an Asset Class from the drop-down list.  In this example select Stock/Inventory.

4.    Select the Asset Holding Account.  The asset holding account will default to “Stock/Inventory on Hand”.

5.    Enter the following details:

Field

Value

Date acquired

10 March 2010

Description

Stock

SoA Value

£15,000

SoA ERV

£15,000

Actual ERV (High)

£15,000

Actual ERV (Low)

£11,000

Stock1.png

6.    Click [Save and Exit].

Adding "Work in Progress" (WIP)

1.    Click on the Financials > Assets tab.

2.    Click Add Asset. The Asset Capture dialog appears.

3.    Select an Asset Class from the drop-down list. In this example select Work in Progress.

4.    Select the Asset Holding Account. The asset holding account will default to “Work in Progress”.

5.    Enter the following details:

Field

Value

Date acquired

17 June 2010

Description

WIP

SoA Value

£3,750

SoA ERV

£3,750

Actual ERV (High)

£3,750

Actual ERV (Low)

£1,500

WIP1.png

6.    Click [Save and Exit].

Adding "Other Assets"

1.    Click on the Financials > Assets tab.

2.    Click Add Asset.  The Asset Capture dialog appears.

3.    Select an Asset Class from the drop-down list.  In this example select Other Asset.

4.    Select the Asset Holding Account.  The asset holding account will default to “Other Current Assets”.

5.    Enter the following details:

Field

Value

Date acquired

17 June 2010

Description

WIP

SoA Value

£3,750

SoA ERV

£3,750

Actual ERV (High)

£3,750

Actual ERV (Low)

£1,500

Other1.png

6.    Click [Save and Exit].

Adding "Contingent Assets"

1.    Click on the Financials > Assets tab.

2.    Click Add Asset.  The Asset Capture dialog appears.

3.    Select an Asset Class from the drop-down list.  In this example select Contingent Assets.

4.    Select the Asset Holding Account.  The asset holding account will default to “Contingent Assets”.

5.    Enter the following details:

Field

Value

Date acquired

1 January 2004

Description

Contingent Assets

SoA Value

£10,750

SoA ERV

£10,750

Actual ERV (High)

£10,750

Actual ERV (Low)

£0

Contingent1.png

6.    Click [Save and Exit].

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