Balance sheet questions. I might be really thick, but is this right?

[bingocaller88]

Hello

Looking over previous year's Limited Company accounts completed by a cheap and friendly accountant I used to use, I note the following from the Balance Sheets:

- Current Liabilities - negative figures. Is this possible? Is it not that a negative liability is simply an asset?

- Balance Sheet from one year to the next. I thought a Balance Sheet was a snapshot of the financial situation at the year-end. Let's say that the year end is 31 March. The figures under 31 March 2009 should look exactly the same whether I am looking at the 2009 return or the 2010 return? Well they don't, and I don't understand why they would not.

[Greg@CapitalCity]

Hi,

Liabilities are usually shown as negative (in brackets). Just do a quick sum to check. Current assets less current liabilities = net assets. If your net assets are LARGER than current assets, then that maybe slightly odd (depending on how he has done things.)

I don't understand the second part of your question as you talk about 'returns'. Do you mean annual accounts? So the March 2009 balance sheet figures in the March 2009 accounts should match the March 2009 balance sheet figures reported in the comparative column within the March 2010 account. Is that what you mean?

[Clare@InTouch]

As Greg says above, but just to add that if the balance sheet isn't the same on both sets of accounts it would presumably mean that a prior year adjustment has been made, or they've used the wrong comparatives (or the old set of accounts you're comparing them with were superseded). Which figures are different?

[bingocaller88]

Hi,
Liabilities are usually shown as negative (in brackets). Just do a quick sum to check. Current assets less current liabilities = net assets. If your net assets are LARGER than current assets, then that maybe slightly odd (depending on how he has done things.)

Thanks for your reply. Under Current Liabilities, trade creditors is a positive number, and Tax is a negative number. Net Assets is less than Current Assets, so OK there.

I don't understand the second part of your question as you talk about 'returns'. Do you mean annual accounts? So the March 2009 balance sheet figures in the March 2009 accounts should match the March 2009 balance sheet figures reported in the comparative column within the March 2010 account. Is that what you mean?

Exactly what I mean, sorry for being unclear.

[bingocaller88]

As Greg says above, but just to add that if the balance sheet isn't the same on both sets of accounts it would presumably mean that a prior year adjustment has been made, or they've used the wrong comparatives (or the old set of accounts you're comparing them with were superseded). Which figures are different?

Thank you. The main thing that is different is the Current Liabilities. But I can see now he has shown a Director's Loan Account on one set but not on the other. The amount in the Director's Loan Account is exactly the difference.

In addition, on one set the "trade debtors" is significantly higher than the figure that I supplied to the accountant. As far as I understand it, that won't affect the tax calculation though, which, to my untrained eye, seems correct.