I have a client who took over a failing company with the agreement that the old debts would be paid off eventually. The debts are from before the current financial year, so I am pondering over where to post these debt payments to on sage. I don't have the original invoices, and presumably don't need them as these were accounted for in previous year(s). I don't want them to interfere with the current year's P&L, and am having a mindblock on what to do with them!
Hi Gill
When you say took over - how acquired? There should be something in a purchase/acquisition document which shows what consideration has been paid to acquire the company and therefore the debts which can give you a steer. Client should have a copy (if not try the Accountant or Solicitor who dealt with the acq) - information in there will dictate how its dealt with in the books.
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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