Writing off cash at bank

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    Overview

    This section explains how to write off a "cash at bank" asset.

    CCH Insolvency handles "cash at bank" assets differently to most other assets, and the normal method for writing off an asset cannot be used here.  A different process must therefore be followed.

    How to write off a "cash at bank" asset

    A situation may occur if, at the date the Statement of Affairs ("SoA") was drawn up, it was believed there was a balance on the job’s bank account.  Following appointment and receipt of up-to-date bank statements, the bank’s legitimate charges were deducted from the account, leaving a minor residual sum or a debit that the bank has chosen to write off.

    The original bank account balance was entered as "cash at bank" and identified as a SoA asset.  The SoA was locked down as at the date of appointment.  This asset will not now be realised.

    In this situation, the cash at bank will show on the Position tab and report as a future realisation.  The cash at bank cannot be deleted as it has been included on the SoA, so it may be decided to write off this asset so that it no longer shows on the Position tab.

    Procedure

    In this example, cash at bank has been entered but the actual value, representing the realisation of the balance, has not been entered:

    Asset record.png

    The asset capture entry shows the SoA book and estimated to realise values entered for producing the SoA:

    Asset capture transaction.png

    The ‘cash at bank’ shows on the Position tab with an ‘estimated future’ value:

    Position.png

    1.    In the Accounts tab, open the "cash at bank" account:

    Account.png

    If the transaction is shown as being reconciled, you should remove the reconciliations as shown in the note below.

    NOTE

    As other steps require posting to this account, there are a couple of steps that need to be made prior those steps.  Edit the account and remove any Locked as at date entered:

    Locked as at date.png

    Click OK.

    Still in the "cash at bank" account, click [Reconcile] and review the reconciliations entered:

    Reconciliation screen.png

    You should [Undo] the reconciliations in the usual way.  Click [OK] to close the reconciliation screen.

    2.    Still in the "cash at bank" account, double-click the transaction to open the asset capture record and input "0.01" in the Actual Value field.

    Asset capture record.png

    3.    Click the [Click here to view capture journal entry] hyperlink.

    Show capture.png

    4.    In the journal entry, click Advanced > Suppress from Receipts and Payments.

    Capture journal.png

    5.    Click [Save and Exit] to close the journal.

    6.    Click [Save and Exit] to close the asset capture record.  You may have to do this twice.

    7.    Click [New Journal Entry] to create a new journal:

    New journal.png

    The entries to post are:

     

    Account

    Value

    Debit

    Equity: Opening Balance

    0.01

    Credit

    Cash at Bank

    0.01

    The journal entry screen should now look similar to the screenshot below:

    Journal - entered.png

    Do not allocate this journal to an asset, as that will change its value.

    8.    Click Advanced > Suppress from Receipts and Payments, then [Save and Exit].

    9.    The "cash at bank" account should now show both transactions as follows:

    Account 2.png

    NOTE

    At this stage, if you require the ‘cash at bank’ to be reconciled, particularly if the reconciliations on this account were undone as in the note above, you may now do so in the usual way.

    10.    The "cash at bank" account can now be closed.

    Reviewing the accounts

    11.    In the Position tab, you should now have zeros in the ‘to date’, ‘future’ and ‘total’ columns.

    Position - post.png

    12.    In the Accounts tab, the "cash at bank" account should show a zero balance.

    Accounts - post.png

    13.    The abstract receipts and payments displays the correct SoA value with a zero realised value.

    Abstract - post.png