The Bookkeepers.Network (BKN)

Post Info TOPIC: Business ceased trading and goodwill received
DH


Member

Status: Offline
Posts: 12
Date:
Business ceased trading and goodwill received


Hi All

I am doing the bookkeeping for a business which ceased trading in 2017. There was some plant & machinery which i have disposed off at tax written down value so effectively nil proceeds. The bit thats confusing me is the business received £40k for the sale of its customer base/contacts etc. I assume this is the goodwill which the purchaser bought. How do i account for the £40k coming into the business. Do i use it as the proceeds in my fixed asset disposal journal? If i do then there will be a small loss on disposal of fixed assets [the NBV was around £25k]. And if so does this loss on dispoal of around £5k  then get added back in the tax comp as usual?



__________________


Master Book-keeper

Status: Offline
Posts: 7083
Date:

What a strange full profile name 'bookkeeper me'!

So hows about an intro before we start. We always ask newbies!

Usual stuff - what prof body do you belong to, do you work for yourself or in a practice/ firm, are you a bookkeeper or accountant, what qualifications, how long in role, where up to in your studies-what exams passed/with what body/in midst of doing, where based, what you did before this role? That sort of thing. Helps get to know you but also how best to pitch answers.

Why have you written down at 'tax written down value'?

What happened to the P&M, was it part of the deal, what was the MV?

Have you seen the business sale contract?

What status of business?

__________________

Joanne  

 

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

 



Master Book-keeper

Status: Offline
Posts: 7083
Date:

Just seen this has been asked before and you have ignored a couple of respondent posts.

For anyone else, check out the previous posts.

As I've said before, not the way to go about getting future answers.

Get your Accountant on the case.

__________________

Joanne  

 

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

 

DH


Member

Status: Offline
Posts: 12
Date:

Hi, thanks for your reply
Ok, I am AAT qualified and work in a small practice. I have been given a small portfolio of clients to work on and quite a few cessation accounts.
The accounts are produced on a break up basis - the company is being struck off/dissolved by dissolution form CS01 and not being sold.
The P&M therefore deemed to transfer to owner at realisable value which is nil.
I'm just not sure how to deal with the goodwill which was given to the company for the customer base.
Thanks again



__________________


Master Book-keeper

Status: Offline
Posts: 7083
Date:

Why realisable value, is that technically correct? In line with legislation?

__________________

Joanne  

 

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

 

DH


Member

Status: Offline
Posts: 12
Date:

Yes i believe it is. The fixed assets are not being sold to anyone and they are deemed to be transferred to the owner at their tax written down value which is nil

__________________


Master Book-keeper

Status: Offline
Posts: 7083
Date:

Believe/assume. Need to deal in facts.

What level of qualification, you didn't say.

__________________

Joanne  

 

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

 

DH


Member

Status: Offline
Posts: 12
Date:

Yes I did. AAT qualified.
Thanks. Any ideas about how to deal with the goodwill element anyone?

Look forward to hearing from you

__________________

DH


Member

Status: Offline
Posts: 12
Date:

We are the Accountants. Just after a bit of advice please



__________________


Master Book-keeper

Status: Offline
Posts: 7083
Date:

DH wrote:

Yes I did.


 Not what I asked you didn't.



__________________

Joanne  

 

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

 



Guru

Status: Offline
Posts: 596
Date:

 

I think Joanne means which AAT qualification and at what Level!

Why are the P&M not being transferred at Market Value? I thought that this would be the case.

This may help with the Goodwill

https://www.gov.uk/tax-when-your-company-sells-assets

Is there no one at your practice who could assist you with these matters?

 



__________________

Doug

These are only my opinions of how I see things and therefore should not be taken as advice



Member

Status: Offline
Posts: 9
Date:

Isn't it DS01 to dissolve a company?

__________________
DH


Member

Status: Offline
Posts: 12
Date:

My certificate says qualified 1 December 2000. I did all the exams at that time, it sounds as though the qualification is multi-tiered now.


__________________
Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.

Tweet this page Post to Digg Post to Del.icio.us
Members Login
Username 
 
Password 
    Remember Me  

©2018 The Bookkeepers Network (BKN). All Rights Reserved. The Bookkeepers Network (BKN) is a trading division of Bookcert Ltd. Registered in England Company Number 05782923. 2 Laurel House, 1 Station Rd, Worle, Weston-super-Mare, North Somerset, BS22 6AR, United Kingdom. The Bookkeepers Network and BKN are trademarks of Bookcert Ltd. This forum is a discussion forum only. There will usually be more than one opinion to any question and any posting should not be viewed as a definitive solution. No responsibility for loss occasioned to any person acting or refraining from action as a result of any posting on this site is accepted by the contributors or The Bookkeepers Network. In all cases, appropriate professional advice should be sought before making a decision. We reserve the right to remove any postings which are offensive, libellous, self-promoting or engaged in covert marketing. We will not notify users of removals. The views expressed in the forum posts are those of the individual and do not necessary reflect or agree with those of The Bookkeepers Network. Any offensive or unsuitable posts will be removed by the moderators. Any reader of this forum can request for a post to be looked into by sending an email to: info@bookkeepers.network or info@bookcert.co.uk.

Privacy & Cookie Policy