One of my clients has acquired a couple of large machines which would have cost him around 10K. He purchased a £30K machine from one of his suppliers and had quite a few problems and they gave him these two machines by way of compensation. I am not sure how to show these in the accounts as I have no invoice for them but they do have a value. I probably need to find out from my client whether the machines are £10K to buy new or are currently worth £10K. Either way I am still not sure how to post them to the accounts or indeed whether they should be posted to the asset register as they have a value but they were not actually purchased? Any advice on the above would be appreciated.
Hi Chris Im assuming they have been invoiced for the £30k machine and thats gone through as normal. Question is now also whether that machine remains worth close to the £30k mark or has it lost a lot of value (hence the new kit supplied) which needs to be written off so the two transactions will almost cancel each other out. I would ask for documentary evidence of the value of the new kit and why it was supplied - there would surely be some letters/emails re the complaint and documented evidence of the supplier's 'compensation' strategy/values and let the Accountant sort this at the end of the year.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
